In December 2022, the IMF approved a 46-month arrangement fund to Egypt worth USD 3 billion (EGP 145.7 billion), which was later increased to USD 8 billion (EGP 388.7 billion) in March 2024.
Egypt’s economy has been struggling for years with inflation. In January 2022, one USD cost EGP 15.7, and one year later, it cost EGP 29.8. In 2022, Egypt’s gross domestic product (GDP) recorded a deficit of 6.1 percent and in 2023, it decreased by one percent, recording 7.1 percent.
Egypt’s external debt was USD 224.7 billion (EGP 10.9 trillion) in 2022, USD 308.15 billion (EGP 14.9 trillion) at the beginning of 2023, and it is expected to be USD 404.1 billion (EGP 19.6 trillion) by the end of 2024, which is a 31.14 percent increase from last year.
Egypt manages its external debt by selling bonds on the international financial markets, receiving loans and investments from Gulf states, and the IMF loan. The macroeconomic challenges the country is facing are complex and the IMF has four goals to guarantee its stability and growth.
One goal is to shift the flexible exchange rate system in Egypt’s domestic economy and have a unified exchange rate. The exchange rate was managed by the Egyptian government, which resulted in a lack of foreign currency in the country and the emergence of a parallel market.
The first step to achieve this goal is to let the Egyptian pound’s value be determined independently in relation to other currencies and make foreign currency available to everybody at the same exchange rate.
The IMF stated that this is expected to help Egypt’s economy and make it adaptable to external economic events, support Egyptian companies with international business, and invite more investments.
