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“Seriously considering” raising IMF’s $3B loan to Egypt | IMF Chief

The IMF chief also highlighted the Israeli war on Gaza’s influence on Egypt, Lebanon, and Jordan’s economies through dwindling tourism and increased energy costs.

By: Business Today Egypt

Sun, Nov. 19, 2023

Egypt could be seeing its $3 billion Extended Fund Facility (EFF) from the International Monetary Fund (IMF) expand, according to IMF Managing Director Kristalina Georgieva, who stated that the organization was “seriously considering” an augmentation due to the economic impact of the Israeli war on Gaza.

Georgieva did not disclose the amount nor the expected date of the agreement.

This potentially confirms October reports that Egypt and the IMF were in talks to boost the loan to $5 billion, as media sources stated that the country was confident that it could address the issues related to the current package.

Speaking to Reuters during the Asia Pacific Economic Cooperation Summit on Friday, Georgieva emphasized the war’s “devastating” effect on Gaza and its economy, and its “severe impacts” on the West Bank's economy.

The IMF chief also highlighted the war’s influence on Egypt, Lebanon, and Jordan’s economies through dwindling tourism and increased energy costs.

Egypt is currently accelerating its strategies related to the IMF’s EFF conditions amid the delays of two reviews scheduled in March and September, leading to around $700 million in delayed loan tranches.

The EFF’s key conditions include a flexible exchange rate system, boosting the private sector’s role in the economy, and reviving its privatization program.

At the IMF and World Bank meetings in October, Finance Minister Mohamed Maait and Deputy Minister of Finance for Financial Policies Ahmed Kouchouk shared that Egypt was in the advanced stages of discussion with the fund on new review dates.

To date, the IMF has not announced a scheduled timeframe for any of the two pending reviews.  

Egypt received the first payment of the EFF loan back in December 2022, worth $347 million. The 46-month loan program’s $3 billion was scheduled to be disbursed in 8 installments after bi-annual reviews.