Lagarde: Egypt has to do more on exchange rate, subsidies files to seal $12bn deal

Egypt has “almost completed” the actions required for International Monetary Fund’s $12 billion loan, but some measures related to the country’s exchange rate and subsidies are still pending, Managing Director Christine Lagarde said Saturday.

The North African country is relying on the IMF loan deal to restore investor confidence and ease its dollar shortage that led to the emergence of a black market for foreign exchange.

“There are several prior actions which need to be completed before the board can actually meet,” Lagarde said at a press briefing during the IMF and World Bank annual meetings in Washington.

“To my knowledge, these prior actions are almost completed — not quite — in relation to both exchange rate and in relation to subsidies, there is still a little bit of implementation to be had before the board can meet.”

The comments will likely add to the announcements made earlier on Friday by Masood Ahmed, the IMF Middle East chief, who told reporters that the IMF board may be able to review the Egyptian loan agreement by early November. Ahmed also said the initial loan payout to Egypt would be at around $2.5 billion.

Lagarde further said she hopes “that the board can meet promptly, and then once the board has met, it will have meant that the prior actions are completed, and therefore the first tranche can be released.”