An IMF team has agreed on a one-year, $5.2 billion financing package for Egypt to help the country alleviate the economic impact of the COVID-19 pandemic, the fund announced Friday.
The IMF board must still approve the financing from the fund’s Rapid Financing Instrument (RFI), which allows nations to circumvent the lengthy negotiations usually needed to secure a full economic assistance program -- time most countries do not have as they struggle to cope with the coronavirus crisis.
The new funding comes on top of $2.8 billion the IMF board approved a month ago, although at the time officials acknowledged that more help would be needed.
IMF reaches agreement w/ #Egypt on US$5.2 billion Stand-By Arrangement, which aims to maintain macroeconomic stability amid #COVID19, provide resources for stronger social safety net, and support reforms to spur growth & job creation. https://t.co/whF5Wpqq22 pic.twitter.com/7qgRq6Hj9J— IMF (@IMFNews) June 5, 2020
Cairo requested the aid, known as a Standby Arrangement, to support its efforts “to maintain macroeconomic stability amid the COVID-19 shock while continuing to advance key structural reforms,” IMF mission chief Uma Ramakrishnan said in a statement.
“This 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,” she said.
It also will open the doors to financing from other lenders and help support job creation by the private sector.
The IMF team held virtual negotiations with Egyptian officials on the terms of the package, which the fund’s board is expected to approve in “coming weeks,” she said.
Egypt has suffered over 1,100 COVID-19 fatalities with over 31,000 cases, according to Johns Hopkins University’s tally.