IMF board to consider new Egypt loan package in coming weeks

Resilience and Sustainability Facility will be presented with package of reforms when board next meets

An employee sits in front of a currency exchange office in Cairo. The IMF plans a new loan agreement for Egypt, addressing economic challenges and reforms while defending its global role amid a US polShow more

The International Monetary Fund plans to put forth a new loan agreement for Egypt before its executive board in the coming weeks, a representative for the Washington-based lender said on Thursday.

“A policy package of reforms will be considered by the fund's executive board, along with the fourth review of programme,” Julie Kozack told reporters during a news briefing at the fund's headquarters.

Ms Kozack said the intention is to present the Resilience and Sustainability Facility (RSF) along with the package of reforms. She did not specify how large the package would be.

The IMF's RSF provides long-term financing to strengthen countries' economic resilience and reduces risks, including ones related to climate change and pandemic preparedness.

IMF staff in December reached an agreement with Egyptian authorities to give the Arab nation access to $1.2 billion.

Egypt's economy has faced several challenges in recent years, including spillover effects from the Gaza war.

Revenue from the Suez Canal – a key source of money for Egypt – has dropped significantly mainly due to Houthi attacks on ships in the Red Sea. Egyptian President Abdel Fattah El Sisi said in December the country had lost about $7 billion in revenue last year, an annual decline of more than 60 per cent.

Regional instability added to a growing list of challenges Egypt's economy has faced in recent years including the war in Ukraine, the Covid-19 pandemic and the government's economic mismanagement.

Ms Kozack said the agreement reached in December will create fiscal space to social programmes benefiting vulnerable groups in the middle class and ensure debt sustainability. The IMF has also urged Cairo to carry out reforms that include lowering inflation, sustaining its flexible exchange rate regime, improve the business environment, and level the playing field between state-owned enterprises and the private sector.

IMF makes case for continued US support

The IMF also defended its position as a key player in supporting the global economy, as recent actions by US President Donald Trump to end support for some institutions raises questions about the fund's future.

Now in his third week in the White House, Mr Trump has undertaken a series of protectionist measures as part of his “America First” agenda while gutting agencies he deems wasteful. That has included shuttering USAID as well as withdrawing from the World Health Organisation and the Paris Climate Accords.

This has led to some questions on the future of US support for multilateral institutions like the IMF and World Bank, both of which were named in Project 2025, a right-wing blueprint for how a Republican administration should manage the federal government.

When asked about concerns that the US could withdraw its support from the IMF, Ms Kozack said the fund has a long history of working with successive administrations.

“We are a global institution. We have a clearly defined mandate to support economic and financial stability, globally, and to ultimately support growth and development in the world economy,” she said.