Egypt has reached a staff-level agreement with an International Monetary Fund (IMF) team on economic policies that could be supported by a 12-month, $5.2bn Stand-By Arrangement (SBA).
The IMF mission, led by Uma Ramakrishnan, held virtual meetings from 19 May to 5 June with Egyptian authorities to discuss IMF financial support for the country’s economic policy plans.
The virtual meetings, held at Egypt’s request, focused on the plans to ensure macroeconomic stability and a strong economic recovery, given the economic impacts of the coronavirus (COVID-19) pandemic.
The plans would also ensure the strengthening of the social safety net, whilst supporting reforms to spur private-sector-led growth and job creation.
“The SBA, with requested access to SDR 3.8bn (equivalent to around $5.2bn), supports the authorities’ efforts to maintain macroeconomic stability amid the COVID-19 shock, while continuing to advance key structural reforms,” Ramakrishnan said, adding, “This will safeguard the gains achieved by Egypt over the past three years and put the country on strong footing for sustained recovery, as well as higher and more inclusive growth and job creation over the medium term.”
She noted that the SBA will also aim to support health and social spending, improve fiscal transparency, and advance further reforms to spur private-sector-led growth and job creation.
The arrangement is also expected to catalyse additional bilateral and multilateral financial support.
Ramakrishnan added, “This agreement is subject to approval by the IMF’s Executive Board, which is expected to consider Egypt’s request in the coming weeks.”