-
The International Monetary Fund said on Thursday it had agreed to a $3 billion Extended Fund Facility (EFF) over 46 months with Egypt, welcoming a move to a "durable exchange rate flexibility" regime and commitments to boosting social protections. Egypt had been in talks with the IMF for a new loan since March after its economic woes deepened due to the war in Ukraine.
-
Egypt's pound slid about 14.5% to a record low against the dollar on Thursday. The central bank also raised interest rates by 200 basis points in an out-of-cycle meeting, saying it aimed to anchor inflation expectations and contain demand-side pressures.
-
The IMF said the deal was expected to catalyze a large, multi-year financing package, including about $5 billion in the fiscal year ending June 2023, reflecting "broad international and regional support for Egypt".
28 Oct 2022
Egypt's IMF Deal
The $3B loan is announced as key interest rates increase by 2%
Share this article
Why it matters
Egypt began seeking a new IMF loan after Russia's war in Ukraine pushed up its bills for wheat and oil while dealing a blow to tourism from two of its largest markets, Ukraine and Russia, a key source of hard currency. Annual headline inflation accelerated to 15% in September, its highest in almost four years, according to official data. Price rises, which come after years of austerity reforms under a 2016 IMF deal, have hurt many of Egypt’s 104 million population.