CAIRO: The International Monetary Fund’s move to grant a new loan to Egypt will have positive repercussions for the country’s economy, according to government officials and economic experts.
The IMF and the Egyptian government recently reached an initial agreement for Cairo to obtain a $3 billion loan from the fund, in addition to another package that includes $1 billion from the Fund’s Sustainability and Resilience Fund, and $5 billion from partner countries for development, amounting to a total of $9 billion in aid.
The head of the IMF’s mission in Egypt, Ivanna Vladkova Hollar, said that the fund had approved the financing program, which extends over a period of 46 months, on the condition that the Egyptian financial authorities initiate certain economic reforms.
Egypt’s central bank said it was intent on intensifying economic reforms and had “moved to a durably flexible exchange rate regime, leaving the forces of supply and demand to determine the value of the Egyptian pound against other foreign currencies.”
Fakhry El-Feky, head of the parliamentary committee for planning and budget, said that the agreement is “a certificate of reassurance.”
He told Arab News: “The agreement will not reduce citizens’ income, but will lead to a reduction in the inflation rate with the application of the monetary policy of the central bank which will control inflation while leaving the dollar exchange rate (up) to the forces of supply and demand.
“The agreement is (necessary in order) to address the repercussions of the global economic crisis resulting from the Russian-Ukrainian war and the pandemic,” he added.
Gihan Madig, head of the Egypt October Party, said in a statement: “The IMF believes that the Egyptian economy is on the right track because Egypt is one of the countries in which growth rates are positive. This reflects the solidity of the Egyptian economy and its ability to withstand global challenges.”
Madig added: “The IMF’s approval to grant a new loan to Egypt will have positive repercussions on the economy during the coming period … I expect that the new loan and the package of measures will ease economic pressures during the coming year.”
Raouf Elsayed-Ali, head of the Egyptian National Movement Party, told Arab News: “The agreement comes in light of the economic reform programs and major national projects, all of which will make Egypt stand on solid foundations.”
He added: “The IMF does not grant funding (without conducting) careful reviews and careful studies on the economic conditions, which gives a strong message to all those inside or outside that the Egyptian economy is stable and secure.”
Nagy El-Shehaby, head of the Generation Party and general coordinator of the National Coalition of Egyptian Political Parties, said: “The agreement must make the government more committed to strengthening social-protection measures for low-income people, and offering more support for employees and the middle class, who are currently suffering from the cruelty of the increasing burdens of life, from the rise in inflation and … from increasing prices.”