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IMF in the final stage of formulating increased financing for Egypt

The International Monetary Fund (IMF) is formulating a new financial support package for Egypt, following upon its plans to increase funding for Egypt’s economic and structural reform program.

Representatives of the IMF are close to finalizing a new financial support package for Egypt, according to the IMF’s Executive Director, Kristalina Georgieva, who said: “We are now in the very final stage, as we are working on the implementation details.”

“We are not talking about a prolonged period at all,” she affirmed.

The Chairman of the Plan and Budget Committee in the House of Representatives and former expert at the IMF, Fakhry al-Fiqi, estimated the volume of new financing from the fund between six and ten billion dollars, while the government and the IMF did not mention the value of the loan.

He added that the government has begun implementing the procedures agreed upon with the IMF to obtain the expected financing, most notably the social protection package, which is the largest to reduce the living burdens of citizens.

However, Fiqi did not propose a clear scenario specifically regarding the decision to devaluate the currency – whether through a gradual reduction managed by the Central Bank of Egypt or leaving it entirely to the flexibility of supply and demand.

President Abdel Fattah al-Sisi on Wednesday ordered the government to implement a new social protection package, the largest at about LE180 billion, which includes increasing the wages of public sector workers, raising the income tax exemption limit, and increasing pensions, in addition to raising the minimum wage for public sector workers by 50 percent to LE6,000.

The head of the House of Representatives’ Planning and Budget Committee added that the government is also determined to strengthen the role of the private sector during the coming period, which the IMF pointed out, following the recent end of the round of reviews of the reform program in Cairo.

According to informed sources who spoke to Al-Masry Al-Youm, the government is waiting for the influx of foreign exchange resources so that it can take the decision to float without a crisis occurring in the exchange market.

Edited translation from Al-Masry Al-Youm

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