IMF Approves $5 Billion Increase To Egypt Loan

Egypt agreed with the International Monetary Fund to increase an initial $3 billion loan package to $8 billion, the two parties announced on Wednesday.

The agreement was announced by Egyptian Prime Minister Mostafa Madbouly and the IMF’s mission leader for Egypt, Ivanna Vladkova Hollar, only hours after the country’s central bank raised interest rates and floated the pound.

By the time the markets closed on Wednesday, the Egyptian pound had fallen to a historic low of approximately 50 pounds to the US dollar, following more than a year of a stable official exchange rate of roughly 30.9 versus the greenback.

Hollar was pleased that Egypt was taking “decisive steps to move to a flexible exchange rate system, starting with unifying the exchange rate between the official and parallel market rates.”

She also stated that the decision will “help increase the supply of foreign currency,” following months of chronic shortages that led a spike in the parallel market rate and raised concerns that Cairo would be unable to service its large foreign debt obligation.

Written by PH

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