12-month US$5.2 Billion Stand-By Arrangement for Egypt

12-month US$5.2 Billion Stand-By Arrangement for Egypt

The Executive Board of the International Monetary Fund (IMF) approved today a 12-month Stand-by Arrangement for Egypt, with access equivalent to SDR 3.76 billion (about US$5.2 billion or 184.8 percent of quota). The new arrangement aims to help Egypt cope with challenges posed by the COVID-19 pandemic by providing Fund resources to meet Egypt’s balance of payments needs and to finance the budget deficit. The Fund-supported program would also help the authorities preserve the achievements made over the past four years, support health and social spending to protect vulnerable groups, and advance a set of key structural reforms to put Egypt on a strong footing for sustained recovery with higher and more inclusive growth and job creation over the medium term.

After a strong track record of successfully completing a home-grown economic reform program supported by the IMF’s Extended Fund Facility in 2016-2019, Egypt was one of the fastest growing emerging markets prior to the COVID-19 outbreak. However, the significant domestic and global disruptions from the pandemic have worsened the 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: (i) protect necessary social and health spending while avoiding an excessive build-up of public debt; (ii) anchor inflation expectation and safeguard financial stability while maintaining a flexible exchange rate; and (iii) implement key structural reforms to strengthen transparency, governance, and competition.

The Executive Board’s approval allows for an immediate purchase of the equivalent of SDR 1.4 billion (about US$2 billion). The remainder will be phased over two reviews.

Source / More information : International Monetary Fund (IMF)

Report by: OGP/Segun Cole , Please email us your industry related news for publication [email protected]
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