The IMF has approved a $1.2 billion disbursement to Egypt, following its fourth review of an $8 billion economic reform program. In addition, Egypt requested access to approximately $1.3 billion under the Resilience and Sustainability Facility. The nation’s inflation has notably decreased, benefiting from reforms tied to the IMF’s support, though economic challenges remain.
The International Monetary Fund (IMF) has authorized a disbursement of $1.2 billion to Egypt following the successful completion of the fourth review of the nation’s $8 billion economic reform program. This approval includes Egypt’s request for an arrangement under the Resilience and Sustainability Facility (RSF), allowing access to approximately $1.3 billion, as confirmed by the IMF’s announcement.
Since 2022, Egypt has sought financing under the RSF to potentially access an additional $1 billion. Recent reports indicate that Egypt’s headline inflation rate significantly decreased to 12.8% in February, down from 24.0% in January, largely attributed to the financial reforms linked to the IMF support agreement. Core inflation also fell unexpectedly, recording 10% year-on-year in February, a decline from 22.6% in January.
In light of the IMF agreement and substantial investments from the UAE, experts and financial analysts anticipate that foreign investors will significantly continue to support their investments in Egyptian treasury bonds. Egypt, facing challenges including high inflation and a shortage of foreign currency, consented to an extended IMF program in March 2024. The nation’s economic difficulties have been exacerbated by a notable fall in Suez Canal revenue due to regional tensions over the previous year.
In summary, the IMF’s approval of $1.2 billion for Egypt, along with the RSF arrangement, marks a pivotal move towards stabilizing the nation’s economy. The recent decline in inflation rates signals the effectiveness of implemented reforms. However, challenges such as high inflation and currency shortages persist, necessitating ongoing financial support and investment for Egypt’s economic recovery.
Original Source: www.tradingview.com
