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International Monetary Fund comments on Egypt’s Ras al-Hikma deal

The Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva, said that Egypt’s announcement on Friday of a $35 billion investment deal from the UAE in the Ras al-Hikma project on the Mediterranean is a “very positive sign.”

She added that the IMF’s agreement with Egypt will be finalized in a few weeks, following the resolution of key issues related to the program review.

Georgieva told Reuters that the IMF is likely to increase the size of the Egypt program due to external shocks.

She described the talks with the Egyptian government as “very constructive” adding that, “We want to give Egypt time to make decisions on monetary policy.”

The IMF Managing Director stressed that Egypt’s stability is significant for the entire Middle East. The most direct impact of the Gaza war on Egypt has been a 55-60 percent reduction in traffic through the Suez Canal, she noted.

Georgieva also said that the IMF will consider financing flows from other sources to close Egypt’s financing gap.

The IMF Managing Director concluded by saying that she had anticipated to complete the program reviews by now, but the Fund “wanted to give the Egyptian authorities time to be confident that all the elements of support are in place.”

In December 2022, the IMF approved a three billion dollar loan from the EFF to help Egypt cope with global challenges.

Egypt received only the first tranche of the loan because it had not yet met the Fund’s requirements for a comprehensive reform program.

The country has been in talks for months to increase the value of the loan and to complete the reviews of the second and third tranches.

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