BREAKING: IMF says reaches staff-level $12 bln loan agreement with Egypt

The International Monetary Fund said on Thursday it has reached a deal to assist Egypt with a three-year loan programme worth about $12 billion tied to economic reforms.

The loan agreement is subject to approval by the IMF’s executive board, which is expected to consider Egypt’s request in the coming weeks.

“the Egyptian government, the Central Bank of Egypt (CBE) and the IMF team have reached a staff-level agreement on a three-year Extended Fund Facility (EFF) in the amount of SDR 8.5966 billion (422 percent of quota or about US$12 billion).” Chris Jarvis, Head of IMF Mission to Egypt, said in a statement.

An IMF team mission visited Egypt and held consultations with officials during the period from July 30 to August 11.

IMF added that upon the loan programme, the Egyptian government’s fiscal policy would be anchored to placing public debt on a clearly declining path toward more sustainable levels.

Over the IMF programme period, Egypt’s general government debt is expected to decline from about 98 percent in 15/16 to about 88 percent of GDP in the financial year 2018/19.

“The aim is to raise revenue and rationalise spending, to reduce the deficit, and to free up public funds for high-priority spending, such as infrastructure, health and education, and social protection.” Jarvis added.

Egyptian government will continue the programme begun in 2014 to rationalise energy subsidies, which will advance the structural reform agenda to help increase investment and strengthen the role of the private sector.