The International Monetary Fund (IMF) and Egypt reached a staff-level agreement to unlock the second tranche of the $12bn, three-year loan programme, the Washington-based fund said in a press release on Friday.<\/p>\n
\u201cThe IMF staff team and the Egyptian authorities have reached a staff-level agreement on the first review of Egypt\u2019s economic reform programme supported by the IMF\u2019s $12bn arrangement,\u201d the IMF said.<\/p>\n
The statement followed a visit by an IMF team last week to conduct a review of Egypt\u2019s reform efforts to decide when the next $1.25bn would be disbursed.<\/p>\n
\u201cThe staff level agreement is subject to approval by the IMF\u2019s executive board. Completion of the review would make available about $1.25bn, bringing total disbursements under the programme to about $4bn,\u201d it added.<\/p>\n
Last November, the IMF clinched a deal with Egyptian authorities on a three-year loan programme and paid out $2.75bn of the first $4bn tranche of the loan.<\/p>\n
Egypt\u2019s Central Bank Governor, Tarek Amer, said that the deal is a new vote of confidence in the local economy.<\/p>\n
\u201cThis deal is telling foreign investors that we are taking the right steps to revive the economy,\u201d Amer told state-run MENA news agency.<\/p>\n
\u201cWe are expecting more foreign inflows, which could spur growth and development,\u201d he added.<\/p>\n
The IMF described the agreement as a \u201ctestimony to the great efforts the government and the Central Bank of Egypt (CBE) have been making to reform the economy.\u201d<\/p>\n
\u201cThe authorities\u2019 economic reform process is off to a good start,\u201d it confirmed.<\/p>\n
\u201cThe liberalisation of the exchange rate, as well as the introduction of a value-added-tax and continuing with energy subsidy reform to strengthen the fiscal position, have all had significant effects. Foreign exchange shortages are resolved, and interbank market activity is recovering.\u201d<\/p>\n
Egypt, which floated its currency last November, introduced a series of austerity measures, including tightening fiscal policies, reducing subsidies, and raising taxes.<\/p>\n
The fund also said it supports the CBE\u2019s objective to bring down the rate of inflation to single digits over the medium term consistent with its price stability mandate.<\/p>\n
\u201cWe are confident that the central bank has the tools to achieve this.\u201d<\/p>\n
The IMF called on the CBE to raise interest rates as a means to tame the rising inflation.<\/p>\n
Egypt\u2019s inflation extended its rally in April, standing at 32.9% year-on-year (y-o-y), the highest in almost 30 years, according to official data released on Wednesday.<\/p>\n
On 23 April, IMF managing director Christine Lagarde said at a press conference that Egyptian policymakers need to put special focus on inflation.<\/p>\n
Following Lagarde\u2019s statements, IMF\u2019s director for the Middle East and Central Asia, Jihad Azour, said in a press conference that \u201cinterest rates are the right instrument to manage Egypt\u2019s inflation.\u201d<\/p>\n
\u201cThe authorities see reducing inflation as a key priority for safeguarding the welfare of people across Egypt. We support the CBE\u2019s objective.\u201d<\/p>\n
\u201cEgypt has regained investors\u2019 confidence, as shown in the great appetite for Egypt\u2019s Eurobond sale in January 2017, and private sector remittances and portfolio investments have increased considerably.\u201d<\/p>\n
The IMF also said that the manufacturing sector\u2014key for job creation\u2014is witnessing a strong rebound, while exports have increased significantly.<\/p>\n","protected":false},"excerpt":{"rendered":"
The International Monetary Fund (IMF) and Egypt reached a staff-level agreement to unlock the second tranche of the $12bn, three-year loan programme, the Washington-based fund said in a press release on Friday. \u201cThe IMF staff team and the Egyptian authorities have reached a staff-level agreement on the first review of Egypt\u2019s economic reform programme supported […]<\/p>\n","protected":false},"author":40,"featured_media":9431,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7863],"tags":[7956,7955,7958,7957],"class_list":["post-9430","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-english-section","tag-egypts-economic","tag-imf","tag-loan","tag-second-tranche"],"yoast_head":"\n