The International Monetary Fund (IMF) said Saturday that its executive board has approved a 46-month $3 billion financial support package for Egypt which is expected to catalyse additional funding of around $14 billion.
The additional funding includes new financing from GCC countries and Egypt’s international partners “through the ongoing divestment of state-owned assets as well as traditional forms of financing from multilateral and bilateral creditors.”
The IMF reached a staff agreement with Egyptian officials in October as the North African has been ramping up efforts to fight inflation caused, in part, due to the war in Ukraine. Egypt has been battling soaring oil and commodity prices while foreign portfolio investors have pulled some $22 billion from what was once a favorite debt market.
“The executive board’s decision enables an immediate disbursement of $347 million (equivalent to SDR 261.13 million), which will help meet the balance of payments need and provide support to the budget,” the IMF said in a statement.
Egypt’s cabinet said that the new IMF financial package is aimed at reducing government debt to less than 80% of the gross domestic product (GDP) in the medium term. The IMF did not require the Egyptian government to cut spending on subsidies, a cabinet report released on Saturday said, adding that the new program aims to strengthen the social protection network for citizens.
