Egypt to Receive $5.2 Billion from IMF to Stimulate Growth

Egypt is expected to receive a $ 5.2 billion loan from the International Monetary Fund (IMF) to support the country maintain macroeconomic stability and push forward major structural reforms amid the shock of the COVID-19, said IMF Mission Chief for Egypt Uma Ramakrishnan.

The IMF announced on Friday that it had reached a Staff-level agreement with Egypt on a $ 5.2 billion Stand-By Arrangement (SBA) for a year to help it deal with the pandemic and its economic implications.

According to Ramakrishnan, the funding would place Egypt on a strong foundation for sustainable recovery as well as higher and more inclusive growth and job creation in the medium term.

IMF Loan supports health, job creation, and macroeconomic stability

She emphasized that financing will also support health and social spending, improve financial transparency and stimulate private sector-led growth and job creation, while paving the way for more bilateral and multilateral financial support.

The IMF said that the agreement, which is be finalized by the Executive Board of the Fund, will protect the economic gains achieved by Egypt over the past three years and put the country in full swing to achieve a sustainable recovery.

The fund noted that the agreement came after virtual meetings with the Egyptian authorities from May 19 to June 5.

The agreement comes after the Egyptian pound, which settled against the dollar for two months, fell 2.2% against the dollar this week, its biggest weekly decline since March 2017.

The SBA comes on top of $ 2.77 billion in funding for the IMF for Egypt, as the epidemic halted tourism, caused a massive flight of capital, and reduced remittances from Egyptian expats abroad.