The International Monetary Fund (IMF) said that it held productive discussions during a staff visit to Egypt on economic policies and reforms to be supported by an extended fund facility (EFF) as the Arab world’s populous nation is reeling under new financial pressure from the war in Ukraine.
“The IMF staff team and the Egyptian authorities had productive discussions on economic policies and reforms to be supported by an IMF Extended Fund Facility,” the fund said in a statement on Friday adding that it will continue close engagement with Egypt toward reaching a staff-level agreement in the period ahead.
The North African country’s net international reserves plunged for the third time this year as Russia’s war in Ukraine piles more pressure on the country’s external finances. Last week, the Central Bank of Egypt (CBE) said that the figure dropped to $33.4 billion last month compared to $35.5 billion in May.
Egypt has received financial assistance from the IMF three times in recent years, borrowing $12 billion under an EFF in November 2016, $2.8 billion under a Rapid Financing Instrument (RFI) in May 2020 and $5.2 billion under a Stand-by Arrangement in June 2020.
The country secured a $500 million (EGP 9.4 billion) loan from the World Bank last month to boost food security. The government has been ramping up efforts to fight inflation, including the central bank’s decisions to raise its key interest rate and devalue the local currency in March.
Egypt has also received help from its oil-rich GCC allies who’ve pledged more than $22 billion in deposits and investments in recent months. Egypt and Saudi Arabia signed 14 investment deals worth $7.7 billion while Abu Dhabi’s ADQ acquired stakes in five publicly-traded Egyptian companies for $1.8 billion and Qatar pledged $5 billion worth of investment.
