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Sunday, 15 August 2021

Egypt receives second tranche of USD 639 mn loan from Arab Monetary Fund

Egypt has unlocked the second tranche of a USD 639 mn loan from the Arab Monetary Fund (AMF) approved in July 2020 to help the country improve its fiscal position. The regional lender disbursed the second, USD 282 mn payment last week to support the country’s ongoing economic and financial reforms, it said in a statement on Thursday

The loan comes under the AMF’s Structural Adjustment Facility, which allocates money to Arab countries that are carrying out structural reforms or are facing liquidity issues due to the pandemic.

There may be more where that came from: Another loan to Egypt may be approved soon, according to the AMF, which said that procedures for granting the new facility “will be completed shortly.” It is unclear whether the new loan would be disbursed under the Structural Adjustment Facility, with the statement only saying that the money would be used to “support [Egypt’s] financial position.”

Egypt has also turned to the IMF for support through the pandemic: The IMF has lent Egypt another USD 8 bn to help cover a balance of payments shortfall and mitigate the impact of the pandemic on its budget deficit,

The last time the AMF extended a loan to Egypt was back in 2015, when it lent the country some USD 339 mn. Including the most recent facility, the AMF has provided Egypt with a total of 14 loans worth an estimated USD 2.24 bn.

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