Egypt’s request for a new support programme from the International Monetary Fund (IMF) “possibly includes additional financing” to support the country’s plans for comprehensive economic reforms, said a Cabinet spokesman on Wednesday.
“Amid the current challenges, Egypt has applied to the International Monetary Fund to start talks between the two sides about a new programme to back the Egyptian state in its plans for comprehensive national economic reform,” an Egyptian Cabinet statement read.
The programme may “include additional financing for Egypt,” the statement added, quoting spokesman Nader Saad as saying.
The Cabinet statement was preceded by a statement by the IMF, which said its “staff is working closely with the authorities to prepare for programme discussions with a view to supporting our shared goals of economic stability and sustainable, job-rich, and inclusive medium-term growth for Egypt.”
Celine Allard, IMF’s mission chief for Egypt, said in a statement that the country requested the fund’s support in the light of the “rapidly changing global environment and spillovers related to the war in Ukraine.”
Such circumstances are posing “important challenges for countries around the world, including Egypt.” Allard noted.
“A set of macroeconomic and structural policy measures would mitigate the impact of this shock on the Egyptian economy, protect the vulnerable, and preserve Egypt’s resilience and medium-term growth prospects.” the IMF official further explained.
The Egyptian Cabinet said that the global economy, notably across emerging markets, is currently facing external shocks, including “unprecedented price uplifts for goods and services, and rising cost of financing as many global central banks have increased their interest rates to rein in the soaring inflation.”
The Russian war in Ukraine has also pushed prices of energy, food commodities and minerals to soar, Saad added. The war also led to the fall and exodus of investments in many emerging countries amid a state of uncertainty, he said.
The Cabinet spokesman said Egypt’s current priorities focus on adopting measures and policies that ensure economic and financial stability and the availability of staple commodities.
Responding to the ongoing economic developments, Egypt’s central bank hiked early Monday the key interest rates by 1 percent and depreciated the pound currency by 14 percent against the U.S. dollar. In addition, the Egyptian Ministry of Finance launched an assistance package worth 130 billion Egyptian pounds to support social protection efforts.
