LDN - Business

IMF team in Cairo to review second installment of $12-billion loan

[May 01, 2017] CAIRO (Reuters) - An International Monetary Fund (IMF) delegation will arrive in Cairo on Sunday to review Egypt's progress on economic reforms before it disburses the second installment of a $12-billion loan program, the Finance Ministry said.

The IMF delegation will stay until May 11 and meet with officials from the ministry and the central bank, the ministry said in a statement.

Egypt agreed the three-year program with the IMF in November, after floating its Egyptian pound currency in a dramatic move aimed at unlocking foreign inflows and boosting exports after a long-running dollar shortage threatened to paralyze the economy.

It promised a raft of tough reforms, including narrowing its budget deficit, in return for the $12-billion loan package from the IMF and a host of other bilateral backers with payments spread over three years and linked to progress on reforms.

The IMF released a first installment of $2.75 billion in November, shortly after the deal was agreed.

Egypt has said it expects to receive the second installment, worth $1.25 billion, in May or June, once the IMF review has been completed.

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The International Monetary Fund logo is seen during the IMF/World Bank spring meetings in Washington, U.S., April 21, 2017. REUTERS/Yuri Gripas

IMF Managing Director Christine Lagarde told Reuters in February Egypt was making good progress on reforms.

As part of reform efforts, Egypt has introduced a Value Added Tax (VAT) and secured $4 billion in eurobonds from international markets in an oversubscribed issuance.

It is also part way through a program to reform power and fuel subsidies and is preparing to privatize several state owned banks and energy companies.

(Reporting by Amina Ismail, editing by Lin Noueihed)

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