If the IMF Board approves, Egypt will receive around $820 million, according to the institution

The International Monetary Fund announced on Thursday that it and Egypt had reached a staff-level agreement about the third review of an expanded IMF loan program. Upon board approval, Cairo would receive around $820 million from the program.

The accord comes after an IMF delegation visited Cairo from May 12–26, 2022, to assess Egypt’s reform performance under an Extended Fund Facility loan, which was increased from a $3 billion loan approved in December 2022 to a $8 billion loan in March.

In a statement, the IMF noted that despite a challenging regional environment characterized by spillovers from the Gaza war and disruptions in Red Sea shipping that have negatively impacted Suez Canal receipts, Egypt is making some headway in its attempts to restore macroeconomic stability.

“While geopolitical tensions and their impact on Egypt remain challenging, the authorities have stayed the course to preserve macroeconomic stability through fiscal discipline, tight monetary policy, and a shift to a flexible exchange rate regime,” Vladkova Hollar, the head of the IMF’s Egypt press release.

“These efforts are beginning to deliver an improved outlook, improved FX availability, inflation starting to slow down, and signs of recovery in private sector sentiment.”

According to Hollar, in order to keep inflation under control, Egypt must continue to divest state companies, maintain strict monetary policy, and pursue conservative fiscal policies.

The staff agreement and payment will be reviewed by the IMF’s Executive Board in the upcoming weeks, according to the statement.