Egypt set to receive 1st tranche of IMF loan

CAIRO — Egypt's Prime Minister Mostafa Madbouly announced on Saturday that the country is set to receive the first installment of an $8 billion expanded loan program from the International Monetary Fund this week.

Speaking at an industrial zone near Cairo, Madbouly said Egypt is working on increasing dollar resources by supporting industry and export.

The IMF had previously approved a $3 billion, 46-month Extended Fund Facility, or EFF, arrangement for Egypt in late 2022, aiming at supporting its economic reforms. However, the relevant first and second reviews were delayed.

On Friday, the IMF said its executive board had completed the first and second reviews of Egypt's $3 billion EFF arrangement and approved an additional $5 billion funding, noting this enables Egypt to immediately draw about $820 million.

Egypt has recently had a large foreign cash inflow after it signed in February a $35 billion investment deal with the United Arab Emirates to develop a new resort city, Ras Al-Hekma, on Egypt's northern coast.

Earlier in March, the World Bank said it intended to provide more than $6 billion "to support Egypt's development and reform efforts", while the European Union announced it will provide a financial package of 7.4 billion euros ($8 billion) to bolster the Egyptian economy.

Over the past two years, the dollar shortage in Egypt has led to the devaluation of the local currency and the rise of a parallel market in the country, plunging Egypt into one of its worst economic crises.

The crisis was further exacerbated by the Palestine-Israel conflict that erupted in October, which has affected Egypt's tourism sector and halved its revenues from the Suez Canal.

In February, Egypt's annual urban consumer price inflation rose to 35.7 percent, significantly exceeding market expectations.

Xinhua