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Monday, 16 May 2022

An agreement with the IMF is coming “within months”

A fresh IMF program could be sealed in a few months: The government expects to reach an agreement with the IMF on a fresh support package “within months”, Prime Minister Moustafa Madbouly said yesterday at a presser (watch, runtime: 2:07:15).

What IMF program? The government has been in talks with the IMF since March for a new assistance program to help it mitigate the impact on our economy of Russia’s war in Ukraine.

Madbouly was tight-lipped on the talks: The PM offered no details on the shape of the program, saying only that “there are talks through the CBE and the Finance Ministry with the Fund … We are moving in great steps … I don’t want to get ahead of events, but the program will be in operation within the next few months,” he said.

What we know so far: Cabinet spokesperson Nader Saad said in March that Egypt is negotiating a “program of support and technical advice” that “may include additional financing” as it tries to cushion the impact of the war in Ukraine on the economy. Talks had reached the “technical stage” in late April, Jihad Azour, the multilateral lender’s head of Middle East and Central Asia, said at the time.

Any new loan from the IMF would be our third in six years: The USD 12 bn facility in 2016 tied to economic reforms after the Sisi administration floated the EGP was followed in 2020 by a USD 5.2 bn standby loan and a USD 2.8 bn rapid financing instrument due to the pandemic.

We’re eligible for each of the three programs, a source familiar with discussions told Reuters in March. Egypt has exceeded its IMF borrowing quota, so any financial assistance will be lent under exceptional access criteria, meaning that the government will face greater scrutiny from the Fund, they said.

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