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IMF, Egypt reaches staff level agreement worth US$820 million

The International Monetary Fund (IMF) announced on Thursday that it reached a staff level agreement with Egyptian authorities on a set of comprehensive policies and reforms needed to complete the third review under the Extended Fund Facility (EFF) arrangement.

Subject to approval by the IMF’s Executive Board, Egypt will have access to about US$820 million, an IMF statement said.

The statement comes shortly after a delegation from the fund concluded a two-week visit to Cairo.

“Tight monetary conditions are needed in the short term to reduce inflation. A flexible exchange rate regime remains a cornerstone of the authorities’ macroeconomic program,” the IMF added.

It explained that the stage is set for an acceleration of structural reforms, which will prove essential towards sustainably raising private sector-led growth.

“The reform agenda includes measures to improve the business environment, by removing binding constraints to private sector activity and leveling the playing field vis-à-vis state entities,” the statement reads.

The IMF’s Egypt mission chief, Ivanna Vladkova Hollar, said that “While geopolitical tensions and their impact on Egypt remain challenging, the authorities have stayed the course to preserve macroeconomic stability through fiscal discipline, tight monetary policy, and a shift to a flexible exchange rate regime.”

“However, downside risks surround the economic outlook, which continues to be affected by spillovers from the conflict in Gaza and Israel and risks of persistence of trade disruptions in the Red Sea, negatively impacting Suez Canal receipts,” she added.

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