Egypt has significantly expanded its financial partnership with the International Monetary Fund (IMF), securing an augmented loan deal now totaling $8 billion, Prime Minister Mostafa Madbouly announced on Wednesday.
This enhancement from the initial $3 billion aims to bolster the country's economic stability and support its reform agenda. In a move toward environmental stewardship, Egypt will also receive an additional $1.2 billion from a facility focused on environmental sustainability.
According to Madbouly, the funding expansion is complemented by soft loans from other international entities, including the World Bank, to foster monetary stability and encourage private sector investments. This strategic financial collaboration underscores Egypt's commitment to prudent fiscal management and the promotion of sustainable economic growth.
In response to the agreement, the Central Bank of Egypt announced significant monetary policy adjustments, including a 600-basis-point increase in interest rates and a transition to a market-determined exchange rate.
These measures aim to steer Egypt toward a flexible inflation-targeting regime, accelerate disinflation, and manage inflation expectations, which are projected to remain above the central bank's target into late 2024.