IMF Executive Board to discuss Egypt 3rd review under $8 bln EFF loan 10 July

In response to Egypt’s request, the IMF raised the loan amount in March by $5 billion to $8 billion amid the repercussions of the regional tensions that harshly affected the country’s economy.

The loan packs Egypt’s second wave of economic and structural reforms.

On 7 June, the IMF announced that it reached a staff-level agreement on the completion of the third review of the EFF loan agreement after a visit of an IMF mission led by Ivanna Vladkova Hollar extended for two weeks.

As the loan amount was raised, the IMF is anticipated to complete the reviews, from the fourth to the eighth, every six months with around $1.3 billion to be disbursed under each.

The IMF’s EFF for Egypt remains centred on four key goals to ensure macroeconomic stability and secure private-sector-led growth.

• Shifting to a flexible exchange rate system will help Egypt’s domestic economy adjust more smoothly to external shocks, support the ability of Egyptian businesses to sell their goods and services abroad, and encourage greater investment.


• Monetary and fiscal policy tightenings, including through containing off-budget capital expenditure, are needed to reduce inflation and maintain debt sustainability. Managing large capital inflows prudently will be important to contain inflationary pressures and limit future external vulnerabilities.


• Recognizing the significant adverse impact of high inflation on purchasing power, targeted budget support to vulnerable households should be warranted and budget space for such support should be protected.


• A better balance between the roles of the public and private sectors is needed, with a focus on enhancing competition and allowing a greater role of the private sector in driving growth.