IMF approves $2.772 bn in emergency aid to Egypt

12 / 05 / 2020

By Marwa Nassar - -

The International Monetary Fund (IMF) approved Egypt’s request for emergency financial assistance of $ 2.772 billion to address the coronavirus (COVID-19).

The financial aid will be extended to Egypt under the Rapid Financing Instrument (RFI) which will help alleviate some of the most pressing financing needs, including for spending on health, social protection, and supporting the most impacted sectors and vulnerable groups.

Egypt achieved a remarkable turnaround prior to the COVID-19 shock, carrying out a successful economic reform program supported by the IMF’s Extended Fund Facility (EFF) to correct large external and domestic imbalances.

The Egyptian authorities have launched a comprehensive package to contain the economic impact of the COVID-19 shock.

The IMF remains closely engaged with the Egyptian government and the Central Bank of Egypt and stands ready to provide policy advice and further support, as needed.

Geoffrey Okamoto, First Deputy Managing Director and acting Chair, said “The COVID-19 pandemic has drastically disrupted people’s lives, livelihoods, and economic conditions in Egypt. The global shock has resulted in a tourism standstill, significant capital flight, and a slowdown in remittances, resulting in an urgent balance of payments need.”

“The Government of Egypt has responded to the crisis with a comprehensive package aimed at tackling the health emergency and supporting economic activity. The authorities acted swiftly to allocate resources to the health sector, provide targeted support to the most severely impacted sectors, and expand social safety net programs to protect the most vulnerable. Similarly, the Central Bank of Egypt adopted a broad set of measures, including lowering the policy rate and postponing repayments of existing credit facilities.”

“Emergency support under the Rapid Financing Instrument will help limit the decline in international reserves and provide financing to the budget for targeted and temporary spending, aimed at containing and mitigating the economic impact of the pandemic.”

“As the crisis abates, measures to lower the debt level would need to resume along with continued implementation of structural reforms to increase the role of the private sector to achieve higher and inclusive private sector-led growth and job creation, unlocking Egypt’s growth potential and entrenching resilience.”