Egypt, IMF sign agreement to extend present loan deal to $8 billion

KEgypt and the International Monetary Fund (IMF) have signed an agreement to extend a current $3 billion loan deal to $8 billion, Prime Minister Moustafa Madbouli told a press conference in Cairo.

A visiting IMF delegation attended the conference, together with Egypt’s Finance Minister Mohamd Maeet and Central Bank Governor Hassan Abdalla.

Egypt can now apply to the IMF’s Resilience and Sustainability Trust (RST) to seek a loan worth $1.2 billion, Madbouli added. In this way, the total loan offered by the fund will hit $9 billion.

Following the agreement, Egypt can seek soft loans from other ‘international partners’,including the World Bank, for an integrated programme that enables the state to achieve monetary stability, the premier said.

Egypt and the IMF have concluded the agreement on the necessary economic policies, to complete the first and second review stages within the framework of the Fund’s extended liquidation mechanism, he said. It is a part of the structural reform policies set by the government.

Meanwhile, Madbouli said that he issued a decision setting a ceiling, a trillion Egyptian pounds, for the total public investments for all state agencies through the whole fiscal year.

The programme targets clear indicators that include increasing the state’s reserves of hard currency, reducing debt, domestic and foreign, in addition to ensuring a significant flow of foreign direct investments over the coming period.

The government will seek higher growth rate to achieve the major goals of reducing inflation and creating job opportunities for youth, in addition to people’s social protection he further said.

For the state, there’s a key goal over the programme’s period, namely governance and rationalisation of spending, the prime minister said, stressing the importance of a private sector’s return to play the biggest contributor in the total investment.

The IMF has stressed the need to protect groups affected by any steps taken within the framework of economic reform, Madbouli said, referring to large, unprecedented social protection package recently announced, and is implemented as of March.