IMF, Egypt agree on 'main policy elements' of economic reform programme

Reuters:  The International Monetary Fund said on Thursday it had agreed with Egypt on the key policy components of an economic reform programme, in a further sign that a final deal to augment the country's $3 billion loan is nearing completion.

Ivanna Vladkova Hollar, the IMF mission chief for Egypt, said both sides had made "excellent progress" on the discussions of a comprehensive policy package that could kickstart long-delayed reviews of the country's economic reform programme.

"To this end, the IMF team and the Egyptian authorities have agreed on the main policy elements of the program. The authorities expressed a strong commitment to act promptly on all critical aspects of Egypt's economic reform program," Hollar said in a statement.

Earlier on Thursday, IMF Managing Director Kristalina Georgieva said the fund and Egypt were in the "very last stretch" of negotiations to increase the country's $3 billion programme.

Egypt has been in talks for the last two weeks with the IMF to revive and expand the loan agreement, which was signed in December 2022.

IMF disbursements on the loan were put on hold last year after Egypt did not follow through on a pledge to let the Egyptian pound respond to market forces, and instead fixed it against the dollar in March.

The Egyptian pound, fixed at 30.85 to the dollar since then, has been trading on the black market as low as 71 pounds.

Hollar, who concluded a two-week visit to Cairo on Thursday, said discussions will continue virtually in the coming days to "identify the magnitude of additional support from the IMF and other bilateral and multilateral development partners needed to help close Egypt's increased financing gaps in the context of recent shocks."