IMF Raises Egypt's Bailout Loan to $8bn

The Egyptian Prime Minister Mostafa Madbouly announced Wednesday that the value of the loan from the International Monetary Fund (IMF) increased from $3 billion to $8 billion.

This came during the press conference held today, in the presence of the International Monetary Fund mission, the Minister of Finance, and the Governor of the Central Bank.

The Prime Minister indicated that after signing the agreement with the Fund, Egypt can apply to the Environmental Sustainability Fund of the International Monetary Fund to obtain a loan of about $1.2 billion; where the total loan provided after the signing will be about $9 billion.

He pointed out that after signing; the rest of the “international partners”, including the World Bank and the International Federation; will provid soft loans to Egypt; so that an integrated program enables the state to achieve monetary stability.

Madbouly announced the government’s success in reaching an agreement between Egypt and the International Monetary Fund regarding the necessary economic policies to complete the first and second review stages within the framework of the Fund’s extended liquidation mechanism.

He announced that a consensus had been reached between Egypt and the International Monetary Fund in the first and second reviews.

Moreover, a decision was issued to set a ceiling for total public investments, so that they do not exceed - during the fiscal year - for all state agencies, EGP 1 trillion, and a committee has been formed that includes all the relevant ministries, and it follows up and issues reports that are directed to the Prime Minister.

Madbouly explained that the program targets clear indicators that include increasing the Egyptian state’s foreign currency cash reserves, reducing debt, whether domestic or foreign, in addition to ensuring a significant flow of foreign direct investments during the coming period.

Madbouly said that the government seeks to target the growth rate of the Egyptian economy with high numbers, to achieve major goals of reducing inflation and creating job opportunities for Egyptian youth; as well as social protection for citizens and groups targeted by social protection programmes.

He stressed that the Egyptian government is aware - in light of the current challenges - that there is a very important goal during the program period, especially its first period; It is a process of rationalization and governance of spending, stressing the importance of the private sector returning to be the largest contributor to the total investments that occur throughout the year in the Egyptian economy.

Egyptian pound exchange rate

Today, the Egyptian pound began to float, and within hours it lost more than 48% of its value against the dollar. By the end of the day, banks were trading the dollar at more than EGP 50 to the greenback, up from about EGP 31. The USD/EGP on the parallel market recorded almost the same value at EGP 51.65.