Egypt has reached a staff-level agreement with the International Monetary Fund for an instalment of about $2 billion more from a three-year, $12 billion loan program, the IMF said in a statement on Friday.
The payment, which is still subject to IMF executive board approval, will bring total disbursements under the program to about $6 billion. Egypt is pushing through an ambitious economic reform package as part of the loan deal.
As part of a second review, the IMF said broad reforms, which included a floatation of the pound currency, were beginning to pay off in terms of “macroeconmic stabilization and return of confidence.”
Bid to boost living standards
“While the reform process has required sacrifices in the short term, seizing the current moment of opportunity to transform Egypt into a dynamic, modern, and fast-growing economy will improve the living standards and increase prosperity,” it said in a statement.
The IMF noted growth for the 2016/17 fiscal period had picked up to 4.2 percent compared to a forecast 3.5 percent, the current account deficit in dollar terms had narrowed and portfolio investments and foreign direct investment had increased.
Egypt floated its currency a year ago, and the pound has roughly halved in value. As the currency dropped, inflation surged to record highs over 30 percent, though consumer prices have dipped in the last three months.