CAIRO - 18 March 2024: Egypt has approached the International Monetary Fund (IMF) to secure an initial installment of $5 billion in April, a government official told Asharq Bloomberg.
The purpose of this request is to strengthen Egypt's economy and ensure a sustainable infusion of foreign currency liquidity.
In March, Egypt entered into an agreement with the IMF to increase its existing deal from $3 billion to $8 billion. Prime Minister Mostafa Madbouly announced this agreement during a press conference, highlighting its significance.
This agreement follows the Central Bank of Egypt's decision to float the Egyptian pound (EGP) and raise interest rates by 600 basis points.
In addition to the IMF agreement, Madbouly revealed that Egypt will receive $12 billion in soft loans from the World Bank and the European Union.
The EU has announced a proposed package of financial support and investments worth €7.4 billion for 2024-2027, to strengthen relations with Egypt. The announcement was made by the Delegation of the European Union during the EU-Egypt Summit held in Cairo on Sunday.
The comprehensive package includes €600 million in grants, with €200 million specifically allocated for migration management. Additionally, €5 billion will be provided in soft loans, and €1.8 billion will be invested in various sectors.
Notably, Goldman Sachs recently projected a surplus of $26.5 billion in Egypt's external financing over the next four years, a significant shift from previous expectations of a $13 billion deficit.
The bank also anticipated that the current deficit would expand to 2.5 percent of the gross domestic product (GDP) by the end of 2027.
These projections take into account various factors, including the United Arab Emirates' investment in Ras El Hekma, the flotation of the Egyptian pound, and the IMF financing deal.
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