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Sat 12 Nov 2016 04:41 PM

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IMF board approves Egypt's $12 billion loan agreement

IMF will give an initial tranche of $2.75 billion of the loan, with the remainder to be phased in over the duration of the programme, subject to five reviews

IMF board approves Egypt's $12 billion loan agreement
The International Monetary Fund head of delegation for Egypt, Chris Jarvis (L), Egypts Minister of Finance Amr al-Garhy (C) and Central Bank of Egypt chief Tarek AmeR (R) (Photo: STR/AFP/Getty Images)

The International Monetary Fund's executive board has approved a three-year, $12 billion loan to Egypt to support its economic reform programme, the Fund has said.

The IMF said its board's approval allows for an disbursement of an initial tranche of $2.75 billion of the loan. The remaining amount will be phased in over the duration of the programme, subject to five reviews, it said.

The Central Bank of Egypt received the $2.75 billion tranche, which increased the country's foreign reserves to $23.3 billion, state television said.

The programme "will help Egypt restore macroeconomic stability and promote inclusive growth," the statement said.

"Policies supported by the program aim to correct external imbalances and restore competitiveness, place the budget deficit and public debt on a declining path, boost growth and create jobs while protecting vulnerable groups."

Import-dependent Egypt has struggled to attract dollars and revive its economy since tourists and investors fled after the 2011 uprising that ended Hosni Mubarak's 30-year rule.

Facing a gaping budget deficit, plummeting foreign reserves and a burgeoning currency black market, it agreed the IMF loan in August but had to secure $5 billion to $6 billion in bilateral financing for the deal to be completed.

Egypt made the final push for the loan after the central bank abandoned its currency peg of 8.8 pounds to the U.S. dollar last week in a dramatic move welcomed by the Fund and World Bank.