Egypt has agreed with the International Monetary Fund (IMF) to merge the first and second reviews of its economic reform program, following delays in the first review due to questions over the country’s progress in meeting IMF’s terms. The announcement was made by Egypt’s Finance Ministry on Monday, as reported by local media.
In December 2022, the IMF approved a $3 billion Extended Fund Facility loan for Egypt. The country has been under significant financial pressure since long-standing issues were revealed by the economic fallout from the war in Ukraine. The loan disbursements are subject to eight reviews over a 46-month program, with the first review originally scheduled for March yet to take place.
The Finance Ministry stated that both IMF and Egypt have agreed to conduct the first and second reviews at the same time, expected to be completed before the end of 2023. It also added that negotiations with IMF are proceeding “fruitfully and positively” in accordance with the terms of the program.
As part of its agreement with IMF, Egypt had promised to adopt a flexible exchange rate, but the official rate has remained almost unchanged for nearly six months at about 30.93 to the dollar. Meanwhile, on the black market, the pound is being traded at about 39 to the dollar.
In June, Egypt’s President Abdel Fattah al-Sisi seemed to dismiss any further devaluation in the near future, stating such a move could potentially harm national security and adversely affect Egyptian citizens.
In other news, an IMF mission led by Jan Kees Martijn, head of the IMF mission for Romania, will be in Bucharest from September 25 to October 4, 2023. This annual consultation under Article IV of IMF’s Articles of Agreement involves discussions about economic policies with officials from various government agencies including the Ministry of Finance and National Bank of Romania. The IMF staff will also meet representatives from the private sector and non-governmental organizations. At the end of the visit, a news conference is expected to be held.
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