IMF is waiting for more reforms before disbursing its second tranche of loan to Egypt says Bloomberg



Sun, 16 Apr 2023 - 03:24 GMT


Sun, 16 Apr 2023 - 03:24 GMT

The International Monetary Fund (IMF) seeks more reforms to be carried out by Egypt’s government prior to its first review of its $3 billion rescue program, Bloomberg reported, citing people familiar with the matter.

The fund is also looking for increased privatization deals for state assets and genuine flexibility in Egypt’s currency, the unnamed sources revealed to Bloomberg.

IMF’s director for the Middle East, North Africa, and Central Asia explained that “the flexibility of the exchange rate is the best way for Egypt to protect its economy from external shocks,” in a press conference last Thursday.

Azour also stated that “inflation keeps hurting the economic stability and the livelihood of people and this is where it is important to maintain monetary policy that addresses and arrests inflation. And we encourage the authorities to use the monetary policy instruments, especially interest rates.”

Annual urban consumer inflation rate increased to 32.7% year-on-year up in March, up from 31.9% in February, according to the Central Agency for Public Mobilization and Statistics (CAPMAS) figures released last week.

The Central Bank of Egypt’s (CBE) Governor, Hassan Abdullah, participated at the annual spring meetings of the International Monetary Fund and the World Bank in Washington and shared that the bank’s focus currently is to decrease inflation to a range between 5% and 9% by Q4 of 2026.

Abdullah also explained that the CBE analyzed various models to understand the drivers behind inflation numbers, and the analysis showed that inflation is not driven solely by commodity prices, but also by supply-side issues such as the recent accumulation of imports.



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