Egypt reportedly in talks with IMF to increase current loan to $5B

Cairo – October 15, 2023: Discussions on a potential increase for Egypt’s current Extended Fund Facility (EFF) loan from the International Monetary Fund (IMF) are ongoing, revealed sources cited by Bloomberg.

According to people familiar with the discussions, Egypt is aiming to increase its Extended Fund Facility (EFF) loan from $3 billion to $5 billion, adding that the government is confident that it can address any obstacles related to the current package.

Any agreement will be announced once Egypt completes its two delayed program reviews, not before, explained the sources.

Egypt is currently awaiting new dates for its two pending reviews which have been delayed since March. However, Finance Minister, Mohamed Maait, has explained that Egypt expects new dates for the reviews to be announced before the end of October.

In a TV interview on Saturday, October 14, on the sidelines of the World Bank and IMF’s annual meetings in Morrocco, Maait also affirmed that Egypt is committed to implementing a flexible exchange rate policy, part of the IMF loan’s conditions.

Successfully passing the reviews would open up around $700 million in delayed loan tranches for Egypt, as well as potentially allowing access to a $1.3 billion Resilience and Sustainability Facility (RSF) and attracting fresh investments from partners in the Gulf.

Bloomberg’s sources shared that an IMF mission may be visiting Egypt soon to start the reviews, with various options expected to be discussed during the visit, including a path for reaching a staff-level agreement on the review.

Last week, Kristalina Georgieva, IMF’s Managing Director, quoted saying that “Egypt has made good progress on a number of fronts”. “Fiscal policy, the implementation of privatization strategy, the engagement with our team on how to best conduct monetary policy in these very challenging times,” she added.

IMF director for the Middle East, North Africa and Central Asia, Jihad Azour, was quoted on a separate occasion during the Morrocco meetings, stating that the IMF and Egypt “are combining the first and the second review and when we get there, it means that strong progress has been achieved”.