The International Monetary Fund’s (IMF) Executive Board approved the third review of Egypt’s Extended Fund Facility (EFF) arrangement on 29 July, enabling a disbursement of approximately USD 820 million (EGP 39.6 billion) to Egypt. “The Egyptian authorities’ recent efforts to restore macroeconomic stability have started to yield positive results. Inflation remains elevated but is coming down. A flexible exchange rate regime remains a cornerstone of the authorities’ program,” the organization explained. Recent data indicates a positive shift in economic conditions, including reduced inflationary pressures and the elimination of foreign exchange shortages. These developments have begun to restore investor confidence and improve private sector outlooks. Despite progress, the IMF also highlighted ongoing challenges, both regionally and domestically. The conflict in Gaza and Israel, as well as tensions in the Red Sea, pose significant external risks. Domestically, the Egyptian government still faces complex policy challenges, necessitating a continued strict adherence to reform commitments under the EFF. The IMF emphasized the importance of maintaining a flexible exchange rate regime and a liberalized foreign exchange system to prevent external imbalances. The Central Bank of Egypt is urged to adopt a data-driven approach to reduce…
