World News

IMF Approves $5bn Increase To Egypt Loan

 

Egypt signed a deal with the International Monetary Fund to increase an initial $3 billion loan package to $8 billion, the two sides said on Wednesday.

The agreement, announced by Egyptian Prime Minister Mostafa Madbouly and the IMF’s mission chief for Egypt, Ivanna Vladkova Hollar, came hours after the country’s central bank hiked interest rates and said it was floating the pound.

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By the time the markets closed on Wednesday, the Egyptian pound was trading at a record low of around 50 pounds to the US dollar, after more than a year of a stabilised official exchange rate of around 30.9 against the greenback.

Hollar welcomed Egypt’s measures as “decisive steps to move to a flexible exchange rate system, starting with unifying the exchange rate between the official and parallel market rates.”

She also said the move would “help increase the supply of foreign currency,” after months of severe shortages that caused a surge in the parallel market rate and raised fears Cairo would be unable to service its massive foreign debt bill.

AFP

Ignatius Igwe

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