Egypt is in talks with the International Monetary Fund (IMF) on possible support that could be a loan or a non-financial agreement as shockwaves from the Ukrainian crisis put pressure on economy, sources told Bloomberg on Thursday.
The discussions are looking at several options including a so-called precautionary and liquidity line, credit that can be tapped if needed, people familiar with the matter told Bloomberg but asked not to be identified as the talks are confidential. It can also be another form of financial assistance.
A non-financial agreement such as a so-called policy coordination instrument, where reforms are discussed and agreed, is also on the table, one of the sources said.
Authorities in Egypt are still in talks with the Washington-based lender over what may be the best option given the challenging global environment, the sources added.
In response to questions by Bloomberg, the IMF’s mission chief for Egypt, Celine Allard did not answer if the talks were on, but said that “we continue to closely monitor the situation and remain closely engaged with the Egyptian authorities.”
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Egyptian officials have acknowledged the War in Ukraine would have economic repercussions that the state is working to mitigate.
IMF’s managing director Kristalina Georgieva said at a recent media roundtable on Ukraine that “I worry for Egypt.”
“If we have a sustained high food and energy prices, how this is going to impact people in Egypt,” Georgieva further explained. “And in that sense, we are already engaged in discussion with Egypt on how to target vulnerable populations and vulnerable businesses.” she added.
