On Sunday 16 October, the Egyptian Ministry of Finance and the Central Bank of Egypt (CBE) announced a “staff-level agreement” between Egypt and the International Monetary Fund (IMF). The agreement entails structural and financial details on Egypt’s new IMF-backed economic reform program.
The final announcement is expected to follow “soon”, noted the Ministry of Finance.
This agreement came after the IMF and the World Bank Group’s annual meeting in Washington DC, which was held between 10 and 16 October.
Egypt is still paying back the first USD 12 billion (EGP 236 billion), out of the USD 20 billion (EGP 394 billion) borrowed from the IMF since 2016. Therefore, future loans are expected to be subject to strict conditions.
“The implementation of the authorities’ comprehensive structural reform agenda would gradually enhance the competitiveness of the economy, reduce the role of the state in the economy, level the playing field for the private sector, improve the business climate, and foster transition towards a greener economy,” stated the IMF Spokesperson.
Through this program, the government aims to reform financial, structural, and monetary policies in the Egyptian economy.
The IMF had previously stated that Egypt needed to make “decisive progress” on fiscal and structural reform in order to foster private sector development and reduce the role of the state.
In response, the Egyptian government is working on improving the business climate in Egypt by increasing private sector contribution to create more job opportunities, and raising the competitiveness of the Egyptian economy.
Egypt initially began talks with the IMF in March, soon after the beginning of the Russia-Ukraine war.
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