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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

IMF Reaches Staff-Level Agreement with Egypt, Unlocking $820 Million Tranche


Thu 06 Jun 2024 | 11:56 PM
The International Monetary Fund (IMF)
The International Monetary Fund (IMF)
H-Tayea

On Thursday, the International Monetary Fund (IMF) announced that it reached a staff-level agreement with Egyptian authorities on a comprehensive set of policies and reforms. This agreement is crucial for completing the third review under the Extended Fund Facility (EFF) arrangement.

In a statement, the IMF indicated that the staff-level agreement will be presented to the IMF's Executive Board for approval. Upon approval, it will enable the disbursement of a new tranche worth $820 million to Egypt.

Background and Implications

Egypt has been working with the IMF under the Extended Fund Facility (EFF) to implement economic reforms aimed at stabilizing the economy, boosting growth, and creating jobs. The EFF arrangement, which typically spans three years, supports countries with significant balance of payments problems. It is designed to address structural issues and promote sustainable economic growth.

Egypt embarked on an ambitious economic reform program in 2016, backed by a $12 billion loan from the IMF. The reforms included floating the Egyptian pound, cutting subsidies, and introducing a value-added tax. These measures, while initially painful for many Egyptians, helped stabilize the economy, reduce the fiscal deficit, and increase foreign reserves.

The current EFF arrangement continues Egypt's reform efforts, focusing on enhancing the business environment, increasing investment, and promoting social protection measures to support the most vulnerable segments of society.