Egypt reaches $3 bn IMF deal

Prior to the agreement, Egypt hiked key interest rates by 2%
Egypt IMF
Egypt reaches agreement with IMF

The International Monetary Fund (IMF) reached an agreement with Egypt on Thursday, paving the way for the economically troubled Arab country to access a $3 billion loan, officials said Thursday.

In a statement issued Thursday, Egypt’s IMF Mission chief, Ivanna Vladkova Hollar, said the 46-month deal includes a series of agreed economic policies Egypt would implement that would, in turn, allow it to access the $ 3 billion loan.

In the hours before the announcement, Egypt’s central bank (CBE) announced a series of economic measures including the hike of key interest rates by 2% and a switch to a more flexible exchange rate system.

“CBE’s move to a flexible exchange rate regime is a significant and welcome step to unwind external imbalances, boost Egypt’s competitiveness, and attract foreign direct investment,” said Holler.

Following the bank’s announcement, the Egyptian pound dropped in value against the U.S. dollar from around 19.75 pounds to a dollar to at least 22.50 pounds to a dollar, according to data provided by the National Bank of Egypt.