Egypt discussing possible new IMF assistance – governor

Egypt is discussing possible further assistance from the International Monetary Fund (IMF) to help it implement structural reforms once its current three-year IMF programme is concluded next month, its central bank governor said on Thursday.

“The government and the IMF are reviewing to see if there is any area for cooperation. There are still discussions on the subject, consultations,” Tarek Amer told reporters.

“We did fiscal reform and monitoring reform. Now we are doing structural reform. We are looking to see if the IMF can help on the subject of structural reform.”

In November 2016, Egypt signed a three-year, $12 billion Extended Fund Facility, after allowing its currency to depreciate sharply, implementing a valued-added tax, and raising fuel prices to reduce its balance of payments budget and deficits.

Amer said Egypt would continue working with the IMF whatever new arrangement was agreed upon.

“At a minimum is the post-programme monitoring in which the IMF continues with us as long as the loan is outstanding,” he added.

Egypt’s government has said it will continue to work on attracting more investment and lowering unemployment by improving the business environment.

IMF Mission Chief for Egypt Subir Lall said the Egyptian government needed to press ahead with reforms to support private sector development and job creation.

“It needs to strengthen governance and competition, better integrate women and youth in the labor market, improve access to land, and limit the role of the state in the economy,” Lall said in remarks sent to Reuters by email.

“We stand ready to support Egypt and its people as they continue the process of transforming the economy to achieve high, sustained and inclusive growth and job creation.”

A Cairo-based economist told Reuters that it could be in Egypt’s interest to continue cooperating with the IMF, perhaps through a classical stand-by arrangement or a simple precautionary financing to help prevent and insure against crises.

“A new IMF programme would reassure investors and reduce the cost of borrowing,” the economist said.

Source: Reuters