IMF executive board signs off on USD 2 bn disbursement: The Executive Board of the IMF announced on Wednesday that it has completed its second review of Egypt’s economic reform program, which will unlock a USD 2.03 bn tranche of the USD 12 bn Extended Fund Facility. The sign-off brings total disbursements to about USD 6.08 bn, the IMF said in a statement. “Egypt’s reform program is yielding encouraging results. The economy is showing welcome signs of stabilization, with GDP growth recovering, inflation moderating, fiscal consolidation remaining on track, and international reserves reaching their highest level since 2011,” said the IMF’s First Deputy Managing Director David Lipton.

The IMF reserved particular praise for Egypt’s central bank: “By tightening monetary policy early in the year, the Central Bank of Egypt (CBE) has managed to reverse high inflation, which was the main risk to macroeconomic stability. The continuation of this disinflationary trend could open the door to a gradual easing of interest rates, but the CBE should remain vigilant and be prepared to tighten the monetary stance if demand pressures reemerge,” said Lipton. He added that the CBE’s decision to introduce a fee upon entry for the repatriation mechanism could help enhance flexibility of the EGP.

Lipton also warned that while the primary surplus targets for 2017-18 and 2018-19 are achievable, they are subject to risks, including from higher oil prices. “Therefore, continued reform of energy subsidies is critical for achieving the program’s fiscal objectives. Over the medium term, the authorities need to implement tax policy reforms and modernize tax and customs administration to create fiscal space for much-needed investment in human capital and infrastructure.”

Vice Minister of Finance Ahmed Kouchouk said he expects the USD 2 bn disbursement to arrive in the coming days. In a call-in to TEN TV on Wednesday (watch, runtime 2:25), he added that disbursements have usually arrived days after a decision from the executive board. Kouchouk reminded viewers that the reform program will be reviewed three more times before the IMF completes disbursing the USD 12 bn loan by June 2019. Finance Minister Amr El Garhy had said that he expected the disbursement sometime in January.

On a related note, the Investment and International Cooperation Ministry said that Egypt received USD 25.5 bn in foreign aid, grants, and loans as of the end of FY2016-17, Al Masry Al Youm reports.