An expected agreement with the IMF after the floating of the pound.. What do we know?

12:38 PM

Wednesday, March 6, 2024

Cairo – Masrawy:

The Egyptian market is awaiting the announcement of the details of an agreement between the government and the International Monetary Fund, today, Wednesday, after the Central Bank announced allowing the liberalization of the exchange rate, and the rise in the price of the dollar in Egyptian banks to levels approaching 49 pounds.

The Fund often calls on Egypt to have exchange rate flexibility as one of the economic reform measures necessary to solve Egypt’s economic crisis, and a prerequisite for conducting two postponed reviews of the program signed in December 2022.

Jihad Azour, Director of the Middle East and Central Asia Department at the IMF, said that it is possible to increase the size of the financing program for Egypt if the financing needs require it, and that increasing the size of the financing program will also be linked to priorities, reforms, and the financing gap, and this matter is currently under discussion.

As part of an agreement with Egypt to cooperate in implementing an economic reform program since December 2022, the IMF provides financing worth $3 billion to be disbursed in tranches over the life of the program, but the two sides are currently negotiating to raise the value of this financing and complete the first and second reviews of the program.

Egypt’s program with the Fund is based on four basic objectives, including: protecting the economy from external shocks, which exchange rate flexibility is one of the tools contributing to achieving, addressing the problem of inflation, which is essential for economic stability, and relaunching the level of the economy in a way that makes growth rates exceed 5 and 6%, thus increasing… The role of the private sector in the economy, in addition to expanding the social protection program.

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