The IMF has approved $1.2 billion for Egypt after the fourth review of its $8 billion reform program, alongside $1.3 billion under the RSF. Inflation rates have significantly decreased due to reforms, and foreign investment in treasury bonds is anticipated to continue despite existing economic challenges.
The International Monetary Fund (IMF) has sanctioned the disbursement of $1.2 billion to Egypt following the completion of the fourth review of the nation’s $8 billion economic reform program. This approval signifies confidence in Egypt’s reform progress and ongoing financial strategies.
Additionally, the IMF’s executive board granted Egypt’s request for an arrangement under the Resilience and Sustainability Facility (RSF), which provides access to approximately $1.3 billion. Egypt has been pursuing this financing option since 2022, aiming to potentially unlock an extra $1 billion.
Recent financial reforms tied to the IMF agreement have yielded positive results, as evidenced by a substantial decrease in headline inflation. Reportedly, annual urban consumer price inflation fell to 12.8% in February from 24.0% in January, while core inflation also declined to 10% year-on-year in February, down from 22.6% in January.
Moreover, the combination of the IMF agreement and record investments from the UAE has led analysts and bankers to anticipate that foreign investors will continue to renew their investments in Egyptian treasury bonds. Egypt has faced significant economic challenges, including high inflation and a shortage of foreign currency, exacerbated by decreased revenues from the Suez Canal amidst regional tensions affecting its economy.
In summary, the IMF’s approval of a $1.2 billion disbursement and support under the RSF reflects confidence in Egypt’s reform efforts. The notable decline in inflation rates signals a positive response to these reforms. Furthermore, the expected continuation of investment in Egyptian treasury bonds underscores a recovery trajectory amidst ongoing economic challenges. Egypt remains focused on stabilizing its economy with international support as a key component.
Original Source: www.tradingview.com
