- Egypt reached an agreement with the International Monetary Fund at the expert level regarding the third review of the Fund’s facility, which was concluded on December 16, 2022 for a period of 46 months and its value was increased earlier this year, enabling Cairo to obtain $820 million, subject to the approval of the Fund’s Executive Board.
According to the Fund’s statement yesterday, the agreement on the review included five main objectives, in light of the geopolitical challenges and their impact on Egypt’s resources:
- Monetary policy conditions need to remain tight in the short term to help push inflation to slow towards the Central Bank of Egypt's target
- The flexible pound exchange rate regime remains the cornerstone of Egypt's macroeconomic program
- Focus additional fiscal consolidation efforts by the authorities on growth-friendly revenue mobilization, including reassessment of value-added tax exemptions
- Creating financial space to invest in human capital through spending on health and education, in addition to social spending, enhancing domestic debt management, and containing financial risks.
- Strengthening the role of the private sector in economic activity to lead growth in a sustainable manner, with the aim of accelerating the pace of structural reforms and addressing risks and challenges. The reform agenda includes measures to improve the business environment by removing restrictions and achieving the principle of equal opportunities.
- It is noteworthy that on the first of last April, the Fund completed the first and second reviews and agreed to increase the basic program credit line by about $5 billion to reach $8 billion, while allowing the Egyptian authorities to withdraw the equivalent of $820 million.
