The International Monetary Fund (IMF) has approved an $8 billion loan package for Egypt, which is expected to boost the country’s flagging economy which has also been affected by the Israel-Gaza war. The programme adds $5 billion to the $3 billion 46-month Extended Fund Facility signed in December 2022 and enables the Arab world’s most populous economy to immediately draw $820 million, IMF said on Friday.
The IMF noted that Egypt’s economic woes have worsened at the onset of the Russia-Ukraine and Israel-Gaza wars, and lately the tensions in the Red Sea. “These developments increased the complexity of macroeconomic challenges and called for decisive domestic policy action supported by a more robust external financing package, including from the IMF,” it said. The expanded loan agreement was announced on March 6 and was made hours after the Central Bank of Egypt increased interest rates and allowed the local currency to freely float with no interventions from the state. Cairo received the first tranche of $347 million after signing the December 2022 deal.
