The agreement with the IMF is a buy-in into our home-grown programme, Deputy Finance Minister Ahmed Kouchouk told Yousef Gamal El Din and Alaa Shahine on Bloomberg Markets Middle East (runtime 05:49). Kouchouk says Egypt is in talks with China for a financing package, but as with previous reports, he could not confirm the amounts Egypt is seeking. “We have an inclusive proactive pillar,” Kouchouk say about the plans to address the inflationary impact of some reforms measures. Egypt will double its spending on cash transfer programmes Takaful and Karama, increasing the number of beneficiaries to 1.5 mn families from around 700k now. Kouchouk says “this is realistic.” The target now is to inspire confidence in the Egyptian economy, but the “real” medium-term goal is to create enough “productive jobs” in the economy through promoting exports and improving the business environment. Shahine followed up by explaining that Egypt’s biggest challenge is triggering sustainable inflows of funds and to convince investors to “put their money in [Egypt] … otherwise … this would be one aid package after the other” (runtime 01:30).

Meanwhile: China gave more detail yesterday about funding talks with Egypt, says there are discussions about a swap agreement: Lu Kang, China’s foreign ministry spokesperson said “China and Egypt’s central banks are in discussions about a local currency swap and have made some initial progress. But they have not decided on the specific scale of the swap.” Reuters notes it is unclear if the swap talks are related to the talks on loans, but reiterated IMF official’s remarks that Fund staff “had held ‘very productive discussions’ with authorities in China and Saudi Arabia” about their contributing to bilateral funding to Egypt.

Saudi Arabia will make a deposit at the CBE “within the next few days,” an unnamed source told Al Mal. We’ve been expecting a deposit of USD 2-3 bn from the Gulf state. Kouchouk said the government had already reached an agreement with Saudi Arabia to provide part of the bilateral funding required by the IMF to unlock its financing agreement.

Second tranche of World Bank funding could arrive soon: A delegation from the World Bank Group is reportedly set to arrive in Egypt on 25 September to negotiate the terms for the second tranche of its three-year, USD 3 bn funding agreement, sources told Al Mal. Egypt received the first USD 1 bn tranche of the agreement this month. International Cooperation Minister Sahar Nasr has also said she is set to sign a USD 500 mn funding agreement with the WB next month to support governorates in Upper Egypt, but it is not clear if this is part of the USD 3 bn agreement or not. In his Bloomberg interview, Kouchouk says that it is a joint delegation from the World Bank and the AfDB that is expected by the end of the month.