IMF Approves Final Egypt Loan Disbursal

Business

June 25th, 7:12am

Washington - Asharq Al-Awsat

The International Monetary Fund approved granting Egypt the final disbursal of the aid loan (Reuters)

The International Monetary Fund (IMF) executive board on Wednesday said it had approved Egypt's request for a $1.7 billion loan, its final disbursement under a plan aiding its recovery from the COVID-19 crisis. The IMF said that Egypt’s near-term fiscal and monetary policies should continue to support the recovery while continuing to preserve macroeconomic stability, as risks to the outlook stemming from global uncertainty and Egypt’s high public debt and gross financing needs remain. IMF staff approved the release of the funds last month as part of a program now valued at $5.4 billion and set up in June 2020 to help the country during the pandemic, $2 billion of which was disbursed immediately. The Washington-based crisis lender greenlit the release of $1.6 billion in December after concluding Egypt's government was managing the downturn well. Egypt's Finance Minister Mohamed Maait said that Egypt is moving forward strongly in the reform and development process, by achieving balance and flexibility between the economic and financial policies adopted. The Egyptian government’s policy of creating harmony between fiscal and monetary policy has helped reduce the negative impacts of the novel coronavirus (COVID-19) pandemic, he added. He pointed to the Ministry of Finance’s success in prolonging debt life by increasing the net domestic issuance of long-term bonds. This aimed to achieve more than 100 percent by the end of March 2021, compared to the IMF program’s target of 70 percent. This was in addition to declining inflation rates, stabilizing the level of local prices, and having a balance of adequate foreign exchange (FX) reserves with the banking sector. IMF mission chief Celine Allard said that the recent approval given by the IMF's Board of Directors to the second review of the credit readiness agreement is evidence of Egypt’s strong policy performance under the program.

from Asharq AL-awsat https://english.aawsat.com/home/article/3046351/imf-approves-final-egypt-loan-disbursal