IMF and Egypt Agree to Unlock $1.6 Billion Financing

The International Monetary Fund reached a staff-level agreement with Egypt on Monday to review two financing arrangements, which could unlock approximately $1.6 billion. This package consists of $1.5 billion under the Extended Fund Facility and $136 million under the Resilience and Sustainability Facility. If approved by the executive board, total disbursements to Egypt will reach about $7.2 billion.

The IMF stated that the Egyptian economy has remained relatively stable despite the broader regional impact of the US-Israeli war on Iran. The organization credited this resilience to specific policy actions, including spending reprioritization and adjustments to electricity and fuel prices. Egypt reported that its foreign reserves climbed to $53.134 billion in May.

To address inflation, which hit 14.6% in May, the IMF advised Egypt to maintain a tight monetary policy and ensure exchange rate flexibility. The fund also recommended that Egypt accelerate the divestment of state assets as part of its existing State Ownership Policy to support long-term growth.