This brings total purchases to $5.4 billion or 184.8 percent of quota, according to IMF statement
The International Monetary Fund’s (IMF) executive board announced last night that their second and final review on Egypt’s economic reform program was completed, allowing Egyptian authorities to draw about $1.7 billion.
This brings total purchases to $5.4 billion or 184.8 percent of quota, according to IMF statement.
The 12-month Stand-By Arrangement (SBA) was approved by the IMF to support the authorities’ economic reform program during the COVID-19 crisis.
The institution also highlighted Egypt’s efforts to maintain macroeconomic stability through fiscal and monetary easing during the COVID-19 pandemic, mitigating the virus’ health and social impact while protecting economic stability, debt sustainability, and investor confidence.
The $5.2 billion one-year SBA was approved back in June 2020, a financing package meant to support Egypt’s economic recovery through the pandemic’s effects on certain key sectors such as tourism and healthcare.
Egypt’s Economic growth is expected to reach 2.8 percent in FY2020/21 and rebound strongly to 5.2 percent in FY2021/22, but the outlook remains clouded by uncertainty while Egypt remains vulnerable to shocks due to its high public debt and gross financing needs, IMF stated.
The IMF previous ranked Egypt as the second largest Arab economy in 2020, with IMF Managing Director Kristalina Georgieva calling Egypt one of the fastest growing economies in the world in April, praising the resilience and ability of the Egyptian economy.
“Egypt entered the COVID-19 crisis with sizable buffers, thanks to reforms implemented since 2016. Faced with unprecedented domestic and global uncertainty, the authorities’ policies struck a balance between ensuring targeted spending to protect necessary health and social expenditures and preserving fiscal sustainability while rebuilding international reserves,” wrote the IMF in its official statement.
“With the immediate crisis subsidizing, deepening and broadening structural reforms will be essential to help unleash Egypt’s enormous growth potential,” it added.
IMF Deputy Managing Director and Acting Chair Antoinette Sayeh said in statements that the Central Bank of Egypt’s (CBE) data driven approach to monetary policy helped anchor inflation expectations. Inflation remains below the CBE’s target range.
“The banking system remains resilient, having entered the crisis well-capitalized and with ample liquidity. As crisis-related measures are unwound, continued supervisory vigilance will be needed to closely monitor lending standards.” Sayeh added.
