Egypt Unlocks $2.3bn IMF Funding After Completing Key Reform Reviews
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The IMF executive board approved Egypt's fifth and sixth Extended Fund Facility (EFF) reviews, unlocking $2 billion immediately from the $8 billion 46-month programme doubled in 2024, alongside $273 million from the first Resilience and Sustainability Facility (RSF) review of its $1.3 billion total. The funding provides timely support navigating geopolitical tensions and market volatility.
IMF praised entrenched macroeconomic stabilisation but flagged uneven structural reforms, particularly slow privatisation/asset divestment creating fiscal space constraints alongside high public debt. The $57 billion international package—including UAE backing—underpins the programme.
CBE recently cut rates to mid-2023 lows and lowered bank reserve ratios to inject liquidity, stimulate private sector borrowing, and support recovery post-major pound devaluation enabling freer trading and inflation targeting. IMF MD Kristalina Georgieva commended monetary reforms.
November's $3.5 billion Qatar tourism deal deposited at CBE strengthened buffers, resuming momentum after delayed reviews tied to privatisation commitments. Egyptian pound ranked among worst performers last week amid US-Iran fears, with dollar bonds lagging EM peers.
Red Sea instability remains a key risk: prior Iran-backed attacks slashed Suez Canal revenues (vital forex source), though Gaza ceasefire aided recovery. Fresh IMF funds offer breathing room as Cairo tests reform sustainability.
