Egypt says IMF to merge two reviews of reform program

Reuters/Johannes Christo

Egypt said it had agreed with the International Monetary Fund (IMF) to merge the fund’s first and second reviews of its economic reform programme, after the first review was repeatedly delayed amid questions over Egypt’s progress in meeting the IMF’s terms.

The IMF in December approved a $3 billion extended fund facility loan for Egypt, which has been under acute financial pressure since long-standing problems were exposed by economic fallout from the war in Ukraine.

Disbursements under the 46-month programme are subject to eight reviews, the first of which, originally scheduled to take place in March, has yet to happen amid reports the IMF was unhappy with Egypt’s progress in fulfilling the terms of the agreement.

“Both the IMF and the Egyptian state agreed to merge the first and second reviews at the same time, which is expected to be determined before the end of 2023,” Egypt’s finance ministry said in a detailed budget explanation carried by its website and reported by local media on Saturday.

It added that negotiations with the IMF were proceeding “fruitfully and positively” in accordance with the terms of the program concluded with the Fund.

Egypt vowed to adopt a flexible exchange rate when it reached the loan agreement with the IMF late last year, but the official rate has remained almost unchanged for nearly six months at about 30.93 to the dollar. The pound is traded at about 39 to the dollar on the black market.

In June, Egypt President Abdel Fattah Al Sisi appeared to rule out a further devaluation anytime soon, saying such a move could harm national security and hurt Egyptian citizens.