IMF approves $12 bln loan to support Egypt’s economy

People walk past a closed exchange bureau with an advertisement showing images of the US dollar and other foreign currency in Cairo. (Reuters)

The International Monetary Fund on Friday approved a three-year, $12 billion loan for Egypt to help the country recover from its economic crisis amid soaring inflation and deficits.

The IMF executive board said it would release $2.75 billion to Egypt immediately, while further disbursements will depend on the country’s economic performance and agreed milestones in implementing the reforms.

The program “will help Egypt restore macroeconomic stability and promote inclusive growth,” the board said in a statement.

“Policies supported by the program aim to correct external imbalances and restore competitiveness, place the budget deficit and public debt on a declining path, boost growth and create jobs while protecting vulnerable groups.”

The move comes after Cairo took crucial preliminary reform steps in recent weeks to meet IMF requirements, including cutting fuel subsidies and floating the Egyptian pound, which subsequently lost 45 percent of its value against the US dollar.

Egypt is reeling after six years of political and economic turmoil involving the ousters of two presidents. Police had to put down some small protests Friday against rising prices, and analysts warn the government will continue to face challenges.

Last Update: Wednesday, 20 May 2020 KSA 09:52 - GMT 06:52