News

IMF Unlocks New $2bn Loan Tranche to Support Egypt’s Reforms

IMF Unlocks New $2bn Loan Tranche to Support Egypt’s Reforms

Photo credit: Mohamed Abd El Ghany / Reuters

The International Monetary Fund announced on Wednesday that its Executive Board has completed the second review of Egypt’s economic reform program, allowing for the release of an additional $US2.03 billion batch of a three-year $US12 billion loan package.

The review brings total disbursements to $US 6.08 billion, the IMF said in a statement.

IMF’s First Deputy Managing Director and Acting Chair David Lipton stressed that the reform program embarked upon by the Egyptian government is showing good results and that the country’s struggling economy is recovering.

“Egypt’s reform program is yielding encouraging results. The economy is showing welcome signs of stabilization, with GDP growth recovering, inflation moderating, fiscal consolidation remaining on track, and international reserves reaching their highest level since 2011,” he said.

Lipton particularly lauded Egypt’s Central Bank for its role in the liberalization of the currency last year and keeping the banking system resilient to potential “moderate shocks.”

“By tightening monetary policy early in the year, the Central Bank of Egypt (CBE) has managed to reverse high inflation, which was the main risk to macroeconomic stability.”

He added that the “continuation of this disinflationary trend could open the door to a gradual easing of interest rates, but the CBE should remain vigilant and be prepared to tighten the monetary stance if demand pressures reemerge.”

He further stressed that continued slashing of energy subsidies is “critical” for achieving the set out economic goals. In the coming period, the government also needs to reform its tax policy, he went on to add.

In exchange for issuing the $12bn loan program, Egypt devalued its currency in November last year and cut down on state subsidies. Following the currency devaluation, the value of the Egyptian pound halved against the greenback and inflation skyrocketed, reaching record levels of over 30 percent.

Prior to the flotation measure, which was a key demand from the IMF, there had been a wide gap between the value of US dollars in banks and in the parallel market. Following the flotation, the lender agreed to loan Egypt $US 12 billion in an attempt to restore its economy.

While the IMF and international financial institutions have praised Egypt’s reform efforts, the situation for ordinary Egyptians has worsened. With prices on basic goods such as sugar, bread and oil left soaring while income levels have fallen behind, the middle and working classes have as of yet largely not benefited from the authorities’ measures

 

Coptic Church to Hold Christmas Mass in Egypt's New Capital
Many Injured After 'Deliberate Car Attack' in Melbourne

Subscribe to our newsletter


News

More in News

Egypt’s Christians Celebrate Palm Sunday

Egyptian StreetsApril 21, 2019

Egyptian Peacekeeper Killed While on Mission in Mali

Egyptian StreetsApril 21, 2019

Death Toll Rises to 290, 500 Injured From Nine Bombings Targeting Churches, Hotels in Sri Lanka

Egyptian StreetsApril 21, 2019

A Quick and Simple Overview of Egypt’s Constitutional Amendments

Egyptian StreetsApril 20, 2019

Mohamed Salah: ‘We Need to Change the Way We Treat Women in Our Culture’

Egyptian StreetsApril 18, 2019

National Referendum on Constitutional Amendments to Take Place from Saturday to Monday

Egyptian StreetsApril 18, 2019

Parliament Approves Constitutional Amendments Extending Presidential Term

Egyptian StreetsApril 16, 2019

Independent Egyptian News Site ‘Mada Masr’ Named 2019 Free Media Pioneer

Egyptian StreetsApril 16, 2019
Egyptian Streets is an independent, young, and grass roots news media organization aimed at providing readers with an alternate depiction of events that occur on Egyptian and Middle Eastern streets, and to establish an engaging social platform for readers to discover and discuss the various issues that impact the region.

© 2017 Egyptian Streets. All Rights Reserved.