IMF awaits more reforms in Egypt before 1st loan program review
Updated 4/18/2023 7:46:00 AM
Arab Finance: The International Monetary Fund (IMF) is waiting for Egypt to implement more of the “wide-ranging reforms” it vowed prior to conducting the first review of the $3 billion bailout program, Bloomberg reported on April 15th, citing unnamed sources familiar with the matter.
The Washington-based fund encourages more privatization deals for state assets and further flexibility in the Egyptian pound to ensure a successful review, the sources added.
In December, the IMF approved a 46-month $3 billion loan to Egypt under the Extended Fund Facility (EFF).
IMF Egypt Mission Chief for Egypt Ivanna Vladkova Hollar said that IMF staff had "fruitful discussions" with Egyptian authorities in preparation for the program's first review during the World Bank-IMF Spring Meetings in Washington.
The IMF's director for the Middle East, North Africa and Central Asia, Jihad Azour, said: "The flexibility of the exchange rate is the best way for Egypt to protect its economy from external shocks.”
Azour pointed out that there is also a need to “redesign the role of the state to focus on priority sectors and allow through leveling the playing field, the capacity for the Egyptian private sector to create growth and create more foreign currencies.”
On the sidelines of the Spring Meeting, Azour told Asharq Business that Egypt has to further hike interest rates to tame soaring inflation.
Meanwhile, IMF Managing Director Kristalina Georgieva said the fund is preparing to conduct the first review, without giving a timeline, adding that "the teams are working and I am confident that we will have a good outcome."
She also added that Egypt may need to slow down the pace of implementing its long-term investment projects.
These projects are certainly good and important projects for Egypt, but in light of the current difficulties, they may undermine macroeconomic stability if they continue to be implemented at the pace that was previously approved in different circumstances, Georgieva said.
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