IMF ap­proves $2.77bn cri­sis aid for Egypt

Kuwait Times - - Business -

WASHINGTON/CAIRO: The Internatio­nal Mon­e­tary Fund on Mon­day said its ex­ec­u­tive board ap­proved $2.77 bil­lion in emer­gency fi­nanc­ing to help Egypt grap­ple with the new coro­n­avirus pan­demic that has brought tourism to a stand­still and trig­gered ma­jor cap­i­tal flight.

The IMF said it re­mained closely en­gaged with the Egyp­tian gov­ern­ment and the Cen­tral Bank of Egypt, and stood ready to pro­vide fur­ther sup­port as needed. IMF First Deputy Man­ag­ing Direc­tor Ge­of­frey Okamoto said Egypt would need “ad­di­tional ex­pe­di­tious sup­port” from mul­ti­lat­eral and bi­lat­eral cred­i­tors to close its re­main­ing bal­ance of pay­ments gap, ease the ad­just­ment bur­den, and pre­serve Egypt’s hard-won macroe­co­nomic stability.

Egypt’s Health Min­istry re­ported 346 new cases of the novel coro­n­avirus on Mon­day, bring­ing the to­tal num­ber of con­firmed cases to 9,746, in­clud­ing 533 deaths.

The out­break has led to the shut­down of Egypt’s tourism sec­tor, a key source of for­eign rev­enue, and threat­ens in­come from the Suez Canal and re­mit­tances from Egyp­tian work­ers based abroad. Egypt’s for­eign re­serves have fallen to $37 bil­lion from more than $45.5 bil­lion at the end of Fe­bru­ary.

The gov­ern­ment has taken steps to con­tain the out­break, in­clud­ing in­tro­duc­tion of a night cur­few and the clo­sure of cafes and mosques, but has stopped short of im­pos­ing a full lock­down as it seeks to keep the econ­omy go­ing. The IMF said Egypt had car­ried out a suc­cess­ful eco­nomic pro­gram be­fore the out­break of COVID-19, the res­pi­ra­tory dis­ease caused by the coro­n­avirus, achiev­ing a “re­mark­able turn­around” in its large ex­ter­nal and do­mes­tic im­bal­ances.

The new funds would help Egyp­tian au­thor­i­ties con­tinue spend­ing on health, so­cial pro­tec­tion, and sup­port­ing the most im­pacted sec­tors and vul­ner­a­ble groups, while lim­it­ing the de­cline in internatio­nal re­serves, Okamoto said. He said Egyp­tian au­thor­i­ties were com­mit­ted to full trans­parency and ac­count­abil­ity on cri­sis-re­lated spend­ing, and had agreed to pub­lish in­for­ma­tion on pro­cure­ment plans and awarded con­tracts, and carry out au­dits of such spend­ing.

As the cri­sis abated, it would be im­por­tant for Egypt to re­sume mea­sures to lower its debt level and con­tinue im­ple­men­ta­tion of struc­tural re­forms, he said. — Reuters

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