Egypt hopes to reach IMF deal within one month or two: minister

By Fatma Ibrahim On Sep 22, 2022

International Monetary Fund logo is seen inside the headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016. REUTERS/Yuri Gripas

Egypt hopes to reach an agreement with the International Monetary Fund (IMF) within one to two months, said Finance Minister Mohamed Maait on Thursday.

The size of a new IMF programme has yet to be decided, since “it’s usually determined throughout and at the final stage of the negotiations,” Maait said in an interview late Wednesday in New York.

“Reaching an agreement with the IMF is a message of reassurance and confidence for international markets.”

Goldman Sachs Group Inc. and Bank of America Corp. have estimated that Egypt may need to secure a $15 billion IMF package. However, the Egyptian minister said in earlier statement that the country is seeking a smaller amount. Analysts told Bloomberg that the aid could be in the range of $3 billion to $5 billion.

Maait said that since March, Egypt witnessed $22 billion in outflows from its local debt market and didn’t have any major inflows.

The government is now working on attracting more foreign direct investment, boosting exports, increasing the number of initial public offerings and putting up for sale stakes in some assets to bring in foreign currency, he added.

Authorities have provided the IMF with updated data about fiscal and monetary policies after the end of the last financial year and the August appointment of a new central bank governor, Maait said. The IMF is currently working with authorities on the country’s external funding gap.

The IMF supports the government’s social programmes and had praise for Egypt’s fiscal approach as well as its track record of reforms, he noted. The fund is negotiating a flexible exchange-rate policy with authorities, according to Maait.

Yet, Maait said Egypt couldn’t reach a hedging contract this financial year “because market conditions were very difficult.”

Egypt is also aware of a possible plan by the IMF to extend emergency funding to countries facing food-price shocks, the minister said. “If Egypt is eligible for this fund, we will definitely use such a facility,” he stated.