The International Monetary Fund’s (IMF) $2 billion latest tranche of a $12 billion loan package will increase foreign reserves to $45 billion and improve the country’s credit rating, said the central bank board of directors member said on Thursday.
The loan’s two percent interest rate was very good compared to usual interest rates on banking loans, Fakhry al-Fekki added.
“Egypt will pay the interest in mid-2021, asserting that the government is committed to repaying $14.7 billion in debts during 2020,” he said.
Acting Managing Director of the IMF David Lipton said the economic reform programme has succeeded in correcting external and internal imbalances, stabilising the macroeconomy, supporting growth and employment, and decreasing the public debt.
The macroeconomy of Egypt has improved since 2016 due to the economic reform programme, Fekki added.
In an attempt to revive its economy, which has faltered since 2011, Egypt obtained an IMF loan in 2016 in exchange for the implementation of a rigorous reform program, beginning with the floating of the pound.
Implementation of the program began in November 2016. The international lender agreed to provide Egypt with a US$12 billion loan in exchange for wide-ranging structural economic reforms.
These reforms include a raft of measures such as devaluing the pound currency, loosening capital controls, ending energy subsidies, reforming public enterprises and overhauling monetary policy, all in a bid to restore economic stability and long-term growth.
Source: Al-Masry Al-Youm
