IMF to disburse another $1.2 bln loan to Egypt in six weeks ahead of review

The International Monetary Fund will disburse another $1.2 billion to Egypt out of its $12 billion loan within six weeks, but pending its delegation’s review on the country’s economic reform programme, an IMF official said Wednesday.

Hazem Al-Beblawi, IMF’s executive director, made these remarks on the sidelines of the door-knocking mission’s visit to Washington. The door knocking mission meet with Al-Beblawi at a time when consultants from the IMF are visiting Cairo from April 30 to May 11 to follow up on the progress in the country’s economic reform programme.

Al-Beblawi further said that all the IMF officials, notably Managing Director Christine Lagarde, had praised the monetary and financial policies and procedures for economic reform taken by the Egyptian government before disbursing the $2.75 billion first tranche.

“The cost of economic reform is not low, but will yield positive results. Although the steps were overdue, the state is taking serious steps towards reform.” the IMF official added.
Egypt negotiated for $4.8 billion loan 5 years ago, then the amount needed rose to $12 billion in 2016, Al-Beblawi said. This indicates a worsening of the situation and the state’s increased need for support.

The loan itself is like a certificate of confidence for the government and its air-tight economic reform that enables it to repay the loan, he noted.

The Executive Board of the IMF agreed earlier in 2016 to give Egypt a $12 billion loan over three years.

IMF noted that the loan aims to support the economic reform programme set by the Egyptian government designated to “place the budget deficit and public debt on a declining path, boost growth and create jobs while protecting vulnerable groups.”