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Egypt: New deal with IMF expected, despite exceeding lending quota

By Sherif Tarek

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Posted on May 18, 2022 15:25

Egypt’s President Abdel Fattah al-Sisi in Brussels, Belgium February 16, 2022. REUTERS/Yves Herman
Egypt’s President Abdel Fattah al-Sisi in Brussels, Belgium February 16, 2022. REUTERS/Yves Herman

Egyptian authorities have been in technical talks with the IMF for weeks over a possible new agreement, which the government hopes will include a new loan, even though Egypt has far exceeded its lending quota from the Fund.

During a press conference on Sunday 15 May, premier Madbouly said a new accord with the IMF, which has disbursed loans worth $20bn in total to the North African country since 2016, is expected to come into effect “in a […] few months”, but he did not disclose the expected value of the financing component.

Allen Sandeep, director of research at Cairo-based investment bank Naeem Holding, believes that a new loan from the IMF could be between $4bn to $6bn. Whichever the case, he tells The Africa Report that an IMF agreement will boost investors’ confidence in the Egyptian market and pave the way for euro-denominated bond issuances.

In another scenario, “the influx of Gulf financial support could act as a substitute for direct IMF lending and mean ongoing talks with the IMF focus on technical advice for policy rather than […] financial assistance that comes with policy contingencies”, James

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