IMF reschedules Egypt's third loan programme review to 29 July

A much-awaited third review of Egypt’s loan programme offered by the International Monetary Fund (IMF), initially expected on Wednesday, has been rescheduled for 29 July, amid no official justifications.

However, an Egyptian finance ministry source told The New Arab that "the recent cabinet reshuffle had impacted the timing of negotiations between Egypt and the IMF."

"The two parties need to talk and discuss several aspects related to the deal given that a new finance minister has been named," the source said, without elaborating further. 

"Not much change is expected, anyway. At the end of the day, the minister is an employee who serves at the pleasure of President Abdel Fattah al-Sisi and executes his strategy and vision," added the source, on condition of anonymity for not being authorised to brief the media. 

Upon completion of the third review, Egypt is expected to receive about US$820 million as an instalment. The Arab World's most populous country has been undergoing the most challenging economic crisis in its modern history, with inflation rate hitting nearly 27 per cent.

The IMF's preliminary plan dictated that Egypt would benefit from a US$3 billion loan over 46 months under the IMF's Extended Fund Facility (EFF), provided the country loosens state and military control over the economy and liberalise the Egyptian pound's exchange rate.

But after long negotiations, IMF extended Egypt's loan programme, on 6 March this year, to US$8 billion, a few hours after the Central Bank of Egypt had officially imposed a flexible exchange rate of the local currency against the US dollar.

A US dollar is equal to about 48 EGP at the publication time.

The move almost ended the parallel, informal market where the value of the US dollar was up to 100 per cent higher, which caused the prices of basic commodities in a country mainly dependent on importation to rise tremendously.

Food prices have become too expensive for poor and average-income households, especially animal protein, milk, rice and cooking oil.

Most recently, the government raised the price of subsidised bread by 400 per cent, the first price increase since 1988, sparking the outrage of the poor in Egypt. Egypt's external debt soared by 5.1 per cent during the fourth quarter of 2022, reaching US$162.94 billion, a total of US$10 billion more than the previous quarter.

Egypt is the world's largest wheat importer for the fiscal year 2023/2024 and is projected to import 12 million tons of wheat, up from 11.2 million the previous year.