IMF Releases $820 Million to Egypt as Part of $8 Billion Aid Plan Amid Economic Challenges
The International Monetary Fund (IMF) has announced the immediate disbursement of $820 million to the Egyptian government, marking a crucial step in aiding the nation's struggling economy. This disbursement is part of a larger $3 billion aid program approved by the IMF's Executive Board in 2022.
The long-awaited action by the IMF, eagerly anticipated by the Egyptian government, comes at a time when the nation is grappling with mounting economic difficulties.
In addition to the $820 million disbursement, the IMF's Executive Board has also approved a $5 billion extension, bringing the total lending to Egypt to $8 billion. This extension was announced earlier this month.
According to a news release sent to AFP on Friday, the IMF noted that the Egyptian government has successfully met the objectives outlined in the initial stages of the aid program, with the exception of the level of foreign currency reserves.
IMF Managing Director Kristalina Georgieva highlighted the Egyptian government's efforts in implementing significant reforms, including the unification of the exchange rate and substantial tightening of monetary and fiscal policies.
Earlier this month, Egypt's central bank raised interest rates by six percentage points to combat inflation and align the official exchange rate with the black market rate, leading to a significant depreciation of the Egyptian pound.
Egypt faces challenges such as a decline in foreign currency earnings, particularly from tourism, and disruptions along the Suez Canal due to various factors, including attacks by Yemen's Huthi rebels.
Despite these challenges, the IMF remains relatively optimistic about Egypt's economic prospects, forecasting a growth rate of 4.4 percent for the coming fiscal year, compared to 3 percent for the current fiscal year ending June 30.
