DUBAI (Reuters) – The International Monetary Fund (IMF) will increase its current loan programme with Egypt by $5 billion, Egypt’s prime minister said on Wednesday, as the central bank allowed the pound to plummet and said it would let the currency trade freely.
The new agreement is an expansion of the $3 billion, 46-month Extended Fund Facility that the IMF struck with Egypt in December 2022, a key plank of which was meant to be a shift to a more flexible exchange rate system.
The programme stalled when Egypt reverted to keeping its pound at a tightly managed rate, and amid delays to an ambitious programme to divest state assets and boost the role of the private sector.
As part of the new agreement, Egypt will also receive a loan of about $1.2 billion from a separate facility that promotes environmental sustainability, Prime Minister Mostafa Madbouly said.
Wednesday’s deal comes less than two weeks after Egypt announced a deal with the Emirati sovereign wealth fund ADQ that it said would deliver $35 billion in investments by late April.
(Reporting by Nayera Abdallah and Elwely Elwelly, writing by Aidan Lewis; Editing by Kevin Liffey)
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