Egypt, IMF agree on $5.2b facility

Move ‘will safeguard the gains achieved by Egypt over the past three years’

Egypt and the International Monetary Fund reached a staff-level agreement on a $5.2 billion stand-by arrangement that aims to alleviate the economic impact of Covid-19, the Washington-based lender said in a statement.

The one-year stand-by arrangement, which is subject to approval by the IMF’s executive board, follows the $2.8 billion in emergency financing that the North African nation secured last month under the fund’s Rapid Financing Instrument, as part of the country’s plan to cover its funding gap.

The Arab world’s most populous nation in late 2016 secured a three-year IMF programme, taking a $12 billion loan and steeply devaluing the currency and cutting subsidies.

Those moves helped rekindle investor interest battered in the aftermath of the 2011 uprising .

The SBA “will safeguard the gains achieved by Egypt over the past three years and put the country on strong footing for sustained recovery as well as higher and more inclusive growth and job creation over the medium term,” said Uma Ramakrishnan, the IMF’s mission chief for Egypt.

The agreement “is important at this stage to continue support the confidence of markets and investors in the ability of the Egyptian economy to deal with the effects of the Coronavirus and the recovery from these effects, in addition to preserving the gains of the economic reform program, which has been praised by all international institutions,” Egypt’s Finance Ministry said.