Policy package: IMF, Egypt make progress

The International Monetary Fund said it had agreed with Egypt on the key policy components of an economic reform program, which is a further sign that a final deal to augment the country’s $3 billion loan is nearing completion.

Ivanna Vladkova Hollar, the IMF mission chief for Egypt, said both sides had made “excellent progress” on discussing a comprehensive policy package that could kickstart long-delayed reviews of the country’s economic reform program.

“To this end, the IMF team and the Egyptian authorities have agreed on the main policy elements of the program. The authorities expressed a strong commitment to act promptly on all critical aspects of Egypt’s economic reform program,” Hollar said.

Earlier, IMF Managing Director Kristalina Georgieva said the fund and Egypt were in the “very last stretch” of negotiations to increase the country’s $3 billion program.

Egypt has been in talks with the IMF for two weeks to revive and expand the loan agreement signed in December 2022.

IMF disbursements on the loan were put on hold last year after Egypt did not pledge to let the Egyptian pound respond to market forces and instead fixed it against the dollar in March.

The Egyptian pound, fixed at 30.85 to the dollar since then, has been trading as low as 71 pounds on the black market.

Hollar, who concluded a two-week visit to Cairo on Thursday, said discussions will continue virtually in the coming days to “identify the magnitude of additional support from the IMF and other bilateral and multilateral development partners needed to help close Egypt’s increased financing gaps in the context of recent shocks.”