Egypt has unlocked approximately $2.3bn in fresh financing from the International Monetary Fund (IMF) after successfully completing key reviews under its expanded reform programme, providing a timely boost as the country navigates regional geopolitical tensions and market volatility.
The IMF’s executive board approved the completion of the fifth and sixth reviews of Egypt’s Extended Fund Facility (EFF), enabling Cairo to immediately access around $2bn. In addition, the board finalized the first review under the Resilience and Sustainability Facility (RSF), granting Egypt access to a further $273m.
The RSF arrangement, approved alongside the broader IMF programme, totals $1.3bn and is designed to be disbursed in tranches to support climate-related and structural reforms.
In a statement, the IMF noted that while macroeconomic stabilization in Egypt has become more entrenched, progress on structural reforms has been uneven. The fund highlighted that efforts to reduce the state’s footprint in the economy—particularly through asset divestment and privatization—have proceeded more slowly than originally envisaged. It also pointed to high public debt levels and elevated financing needs as ongoing constraints on fiscal space and medium-term growth.
The latest disbursement comes at a sensitive moment for Egypt’s economy. Heightened fears of a potential US-Iran conflict have rattled emerging markets, and Egypt has not been immune. Over the past week, the Egyptian pound ranked among the world’s worst-performing currencies, while its dollar-denominated bonds posted the weakest performance among emerging-market peers.
Investor confidence in Egypt remains closely tied to its adherence to IMF-backed reforms. In 2024, the fund more than doubled the size of Egypt’s 46-month programme to $8bn as part of a broader international support package estimated at $57bn. That package also included significant financial backing from regional partners, notably the United Arab Emirates.
The IMF had previously postponed the fifth review and combined it with the sixth, awaiting further progress on privatization commitments. Momentum resumed after Egypt secured a $3.5bn tourism investment deal with Qatar in November, with the funds deposited at the Central Bank of Egypt, strengthening external buffers.
On the monetary front, reforms have drawn praise from IMF Managing Director Kristalina Georgieva, who recently commended Egypt’s move toward exchange-rate liberalization and inflation targeting. The country undertook a major currency devaluation two years ago, allowing the pound to trade more freely—an essential pillar of the IMF programme.
Earlier this month, the Central Bank of Egypt cut interest rates to their lowest level since mid-2023 and reduced the reserve ratio for banks, injecting additional liquidity into the financial system. The measures aim to stimulate borrowing, support private-sector activity, and accelerate economic recovery.
However, risks remain. Any renewed instability in the Red Sea could further pressure Egypt’s finances. Previous attacks on shipping routes by Iran-backed groups significantly reduced Suez Canal revenues, a key source of foreign currency, though traffic had begun to recover following a ceasefire in Gaza last year.
With fresh IMF funding secured, Egypt gains short-term financial breathing room. The coming months will test whether reform momentum can be sustained amid regional uncertainty and persistent structural challenges.
