Egypt & IMF reach initial agreement for $3 billion loan

Cairo: The International Monetary Fund reached an agreement with the Egyptian government on Thursday, paving the way for the economically troubled Arab country to access a $3 billion loan, officials said Thursday.

IMF officials said a staff agreement between the Egyptian govt and IMF leaders had been reached following months of talks as Egypt struggles to combat surging inflation caused, in part, by the war in Ukraine.

In a statement issued Thursday, Egypt's IMF Mission chief, Ivanna Vladkova Hollar, said the 46-month deal includes a series of agreed economic policies Egypt would implement that would, in turn, allow it to access the $3 billion loan.

In the hours before the announcement, Egypt's central bank announced a series of economic measures including the hike of key interest rates by 2 per cent and a switch to a more flexible exchange rate system.

The Central Bank of Egypt's move to a flexible exchange rate regime is a significant and welcome step to unwind external imbalances, boost Egypt's competitiveness, and attract foreign direct investment,'' said Holler.

The Egyptian economy has been hard-hit by the Covid pandemic and the war in Ukraine, events that have disrupted global markets and hiked oil and food prices worldwide. Egypt is the world's largest wheat importer, most of which came from Russia and Ukraine.