URGENT: IMF board approves expanded $8 billion loan deal

The International Monetary Fund’s (IMF) executive board has approved the augmentation of the current loan programme with Egypt by $5 billion, the IMF said in a statement on Friday.

“The Executive Board of the International Monetary Fund (IMF) completed the first and second reviews of Egypt’s Extended Fund Facility arrangement with Egypt and approved an augmentation of the original programme by about US$5 billion (SDR 3.76 billion).” the statement read.

The approval will enable Egyptian authorities “to immediately draw about $820 million (SDR 618.1 million).”

Kristalina Georgieva, Managing Director of the IMF, commented: “The (Egyptian) authorities have significantly strengthened the reform package underlying the Extended Fund Facility arrangement, supported by an augmentation of access. Recent measures toward correcting macroeconomic imbalances, including unification of the exchange rate, clearance of the foreign exchange demand backlog, and significant tightening of monetary and fiscal policies, were difficult, but critical steps forward, and efforts should be sustained going forward.”

On December 16, 2022, IMF’s executive board approved a 46-month arrangement of around $3 billion under the Extended Fund Facility (EFF) to Egypt. However, authorities and the IMF had been in negotiations over the first and second reviews of Egypt’s reform programme throughout 2023.

This was until earlier this month when the two parties reached a staff level agreement on a set of comprehensive policies and reforms needed to complete the reviews and apply an extension of the EFF programme. The IMF had cited at the time of reaching the staff-level agreement “significant macroeconomic challenges that have become more complex to manage with the impact of the recent conflict in Gaza on tourism and Suez Canal receipts.”