IMF approves 4th tranche of $12 billion loan for Egypt

CAIRO - 30 June 2018: The International Monetary Fund's (IMF) Executive Board headed by Tao Zhang, Acting Chair, and Deputy Managing Director approved on Friday the fourth $2 billion tranche of Egypt’s $12 billion Extended Fund Facility, the IMF said n a statement.

In May, an IMF delegation visited Egypt for 16 days in a third review of the state’s economic reform program. After the visit, the IMF issued a staff-level agreement.

The approval of the IMF’s Executive Board of this review means the payment of a further $2 billion, bringing total disbursements under the program to $8 billion of a $12 billion loan agreement.

Egypt has received the third tranche of the loan in December 2017.

The statement noted that “Egypt has begun to reap the benefits of its ambitious and politically difficult economic reform program. While the process has required sacrifices in the short-term, the reforms were critical to lay the foundation for strong and sustained growth that will improve living standards for all Egyptians.”

“Egypt’s growth has continued to accelerate during 2017/18, rising to 5.2 percent in the first half of the year from 4.2 percent in 2016/17. The current account deficit has also declined sharply, reflecting the recovery in tourism and strong growth in remittances, while improved investor confidence has continued to support portfolio inflows. In addition, gross international reserves rose to $44 billion by the end of April, equal to 7 months of imports,” the statement read.

Egypt clinched a $12-billion loan from the International Monetary Fund (IMF) after the flotation of its currency in November 2016, losing about 50 percent of its value.

The IMF loan helped the state’s foreign reserves to rebound by receiving the first three tranches of the loan with a total value of $6.08 billion.

Deputy Minister of Finance for Financial Policies Ahmed Kojak, announced earlier that Egypt will repay the installments of the International Monetary Fund’s loan starting from May 2021 until November 2026.

Kojak clarified during the World Bank Group and International Monetary Fund Spring Meetings that the first installment amounted to $2.75 billion.