Cairo – Mubasher: The International Monetary Fund’s (IMF) executive board will meet in the coming weeks to approve giving Egypt the second tranche worth $1.25 billion of its loan, IMF mission chief for Egypt Chris Jarvis said.
The Egyptian government has prepared a strong public budget for fiscal year 2017/2018, which sets clear pathways for reducing deficits and shows a major surplus for the first time in years, Jarvis told Egyptian TV channel CBC via conference call.
In coordination with the IMF, Egypt is implementing an economic reform programme that has so far included the liberalisation of the local Egyptian pound, the gradual reduction of subsidies, the increase in customs’ tariffs, and a number of other steps in the framework of the $12 billion loan.
Last week, an IMF delegation concluded its first review of Egypt's economic reform programme and approved a staff level agreement to provide the next instalment of the loan, while also praising the government's efforts.
The Egyptian government received the first tranche worth $2.75 billion in November 2016.
The economic reform procedures were expected to ease sovereign debt in the current fiscal year, Jarvis said, praising the government’s efforts to curb inflation.
The EGP’s flotation procedures, the New Investment Law, and the newly approved industrial licensing act were reforms that would improve the efficiency of the economy, stimulate the investment atmosphere, drive growth, and provide jobs, the IMF mission chief for Egypt noted.
Egypt floated the exchange rate of the EGP against foreign currencies in November 2016, allowing it to be subject to the demand and supply in local banks.
The flotation resulted in the US dollar price surging to EGP 18, from the previously pegged EGP 8.88.
Earlier in May, the governor of the Central Bank of Egypt (CBE) Tarek Amer said that the IMF's approval of the second tranche of the loan was like a boost of international confidence for the Egyptian economy in light of the recent reform procedures.
This confidence will help increase foreign investments in the Egyptian economy, which in turn will help in the launch of projects, Amer added.
