Kristalina Georgieva - Brussels, Belgium 16 October 2012 EU DEVDAYS 2012 - Panel Disaster Risk Reduction in the Age of Climate Change - European Commission DG ECHO / Flickr
CAIRO - 7 November 2022: “Egypt has obtained a soft payment plan for the $3 billion new program it reached with the International Monetary Fund (IMF),” The IMF’s Managing Director, Kristalina Georgieva stated.
Georgieva added in a TV interview after her meeting with President Abdel Fattah El-Sisi on Sunday that the payment terms for the loan are that Egypt will obtain a 10-year grace period, provided that it will take another 10 years to repay the principal. and interest.
"I applauded Egypt’s commitment to strong policies to shield its economy from successive global shocks. Bold reforms will help secure a more inclusive & sustainable future for its people. We’re keen to work with Egypt on its climate agenda,” Georgieva tweeted after the meeting with the president.
Georgieva commented: “The decision to float the pound was a smart move.” She added, “If you try to protect the local currency, you are draining your foreign reserves.”
Georgieva described Egypt's early decision to request new assistance from the IMF as a good step.
With regard to the global economy, Georgieva said that a third of the global economy may be affected by a recession next year, adding that the world will witness $4 trillion in economic output between now and 2026.
In October, the IMF staff and Egypt announced reaching
a staff-level agreement on comprehensive economic policies and reforms that will be supported by a $3 billion Extended Fund Facility (EFF) arrangement for a 46-month period.
The new financing aims to protect macroeconomic stability and debt sustainability, improve Egypt's resilience to external shocks, strengthen its social safety net, and intensify reforms that support private sector-led growth and job creation.
The IMF arrangement is expected to catalyze a large multi-year financing package, including about $5 billion in the 2022/2023 fiscal year, which reflects broad international and regional support for Egypt, according to the IMF’s statement.
The Egyptian authorities have also requested funding under the newly established Resilience and Sustainability Facility (RSF), which could provide up to an additional $1 billion to Egypt.
This came after the Central Bank of Egypt (CBE) announced the issuance of
several decisions related to the exchange rate, interest rates and letters of credit for importing.
The decisions which were taken in an exceptional meeting included raising the Central Bank of Egypt’s (CBE) interest rates by 200 basis points or 2 percent, in an exceptional meeting.
The overnight deposit rate, overnight lending rate, and the rate of the main operation were raised to 13.25 percent, 14.25 percent, and 13.75 percent, respectively. The discount rate was also kept raised to 13.75 percent.
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