Egypt Watch

IMF stresses the complete liberation of the Egyptian pound

On Thursday, the Managing Director of the International Monetary Fund, Kristalina Georgieva, said that the financing program agreed upon by the significant financial agency with Egypt is based on three main determinants, which are the liberation of the local currency exchange rate, allowing the private sector to lead the economy, and monitoring spending on long-term mega projects.

In a speech at the Spring Meetings of the International Monetary Fund and the World Bank Group held in Washington, she added that the following IMF review of economic reforms in Egypt, scheduled for September, will bear good results. Egypt is awaiting the second tranche, $347 million, of the IMF loan, as part of the agreement, which provides additional stimulus financing of about $14 billion from Egypt’s international and regional partners. Bloomberg has quoted the Head of the IMF Monetary and Capital Markets Department, Tobias Adrian, as saying that adjusting the exchange rate of the Egyptian pound is a key factor for achieving economic stability in the country because it allows the Central Bank of Egypt to implement monetary policy appropriate to local conditions.

On Thursday, Egyptian President Abdel Fattah El-Sisi agreed to amend the agreement concluded in 2018 between the Egyptian government and the International Islamic Trade Finance Corporation so that the potential credit ceiling for Egypt would be $6 billion instead of $3 billion. The Egyptian Ministry of Planning has published on its website data showing that Egypt’s external debt had risen to more than $162.9 billion in 2022. Egypt’s external debt had thus increased by more than three times what it was ten years ago when it recorded $38.8 billion in 2012. According to estimates by the Egyptian Ministry of Finance, the country faces a funding gap of $16 billion over the next four years.