The Executive Board of the International Monetary Fund (IMF) approved on Friday a 12-month Stand-By Arrangement (SBA) for Egypt, with access equivalent to SDR 3.76bn ($5.2bn or 184.8% of the quota).
The new arrangement aims to help Egypt cope with the challenges posed by the novel coronavirus (COVID-19) pandemic. It will provide the resources Egypt requires to meet its balance of payments needs and to finance the budget deficit.
The IMF-supported arrangement will help the Egyptian authorities preserve the achievements made over the past four years, and support health and social spending to protect vulnerable groups.
It will also go towards advancing a set of key structural reforms to put Egypt on a strong footing for sustained recovery with more inclusive medium-term growth and job creation.
In a press statement, the IMF said that Egypt was one of the fastest growing emerging markets prior to the pandemic. This follows on from a strong track record of successfully completing a home-grown economic reform programme supported by the IMF’s Extended Fund Facility of 2016-2019.
The IMF statement noted, however, that the significant domestic and global disruptions off the back of the pandemic have worsened Egypt’s economic outlook and reshuffled policy priorities.
“The authorities’ economic policy framework, supported by the SBA, aims to maintain Egypt’s macroeconomic stability with priorities to: protect necessary social and health spending while avoiding an excessive build-up of public debt; anchor inflation expectation and safeguard financial stability while maintaining a flexible exchange rate; and implement key structural reforms to strengthen transparency, governance, and competition,” the IMF said.
