IMF Approves $1.2 Billion Disbursement for Egypt Following Reform Program Review

The IMF has approved a $1.2 billion disbursement to Egypt following the fourth review of its $8 billion economic reform program. The approval includes access to $1.3 billion under the Resilience and Sustainability Facility. Egypt has seen a marked decrease in inflation rates, attributed to financial reforms, boosting confidence among foreign investors.

The International Monetary Fund (IMF) has authorized a disbursement of $1.2 billion to Egypt following the completion of the fourth review of the country’s $8 billion economic reform program. This financial support aims to reinforce Egypt’s ongoing economic recovery efforts under the IMF framework.

Additionally, the IMF’s executive board approved a request from Egypt to access approximately $1.3 billion under the Resilience and Sustainability Facility (RSF). Egypt has sought financing from the RSF since 2022, believing it could provide vital funding of up to $1 billion.

Recent reports indicate a significant decline in Egypt’s inflation rates. Headline inflation nearly halved in February, dropping to 12.8% from 24.0% in January, while core inflation also decreased notably to 10% year-on-year from 22.6% in January. These positive results are attributed to financial reforms implemented as part of the IMF agreement.

Given the support from the IMF, along with substantial investments from the UAE, analysts predict that foreign investors will likely continue their investments in Egyptian treasury bonds. Egypt has been facing challenges, including high inflation and foreign currency shortages, prompting its agreement to the expanded IMF program in March 2024, especially after a significant decline in Suez Canal revenue due to regional tensions over the previous year.

The IMF’s approval of $1.2 billion for Egypt, along with additional funds from the Resilience and Sustainability Facility, marks a crucial step in supporting the country’s economic recovery. With inflation rates showing promising declines and foreign investments anticipated, Egypt’s financial reforms under the IMF program could pave the way for improved economic stability moving forward.

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