The International Monetary Fund (IMF) has confirmed the completion of the first and second reviews of the Extended Fund Facility arrangement for Egypt. The IMF Executive Board approved an increase of the original program by approximately US$5 billion (SDR 3.76 billion).
This approval permits the immediate drawdown of about US$820 million. Although most quantitative performance targets for the end of June 2023 were met, a waiver was granted by the board for non-observance of the June performance criterion on Net International Reserves. According to an IMF press release, this approval arrives amidst challenging macroeconomic conditions characterized by rising inflation, foreign exchange shortages, and elevated debt levels. These challenges have been exacerbated by regional conflicts, necessitating decisive domestic policy action and increased external financing support.
"The authorities have significantly strengthened the reform package underlying the Extended Fund Facility arrangement, supported by an augmentation of access," said Kristalina Georgieva, managing director and chair of IMF. She added that "recent measures toward correcting macroeconomic imbalances, including unification of the exchange rate, clearance of the foreign exchange demand backlog, and significant tightening of monetary and fiscal policies, were difficult but critical steps forward." Georgieva emphasized that these efforts should be sustained in future. She also commended authorities' commitment to use a large part of new financing from the Ras El-Hekma deal to improve reserve levels, expedite clearance of foreign currency backlogs and arrears, and reduce government debt upfront as prudent.
According to information provided on its About webpage, the IMF operates as a global organization with 190 member countries. Its mission is to foster sustainable growth and prosperity worldwide through supporting economic policies conducive to financial stability and monetary cooperation. Ultimately, it aims to enhance productivity, job creation, and economic well-being under the governance and accountability of its member countries.