IMF, Egypt Agree on ‘Main Policy Elements’ of Economic Reform Program 

Egyptians buy food at a popular market in Cairo, Egypt February 1, 2024. (Reuters)
Egyptians buy food at a popular market in Cairo, Egypt February 1, 2024. (Reuters)
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IMF, Egypt Agree on ‘Main Policy Elements’ of Economic Reform Program 

Egyptians buy food at a popular market in Cairo, Egypt February 1, 2024. (Reuters)
Egyptians buy food at a popular market in Cairo, Egypt February 1, 2024. (Reuters)

The International Monetary Fund said on Thursday it had agreed with Egypt on the key policy components of an economic reform program, in a further sign that a final deal to augment the country's $3 billion loan is nearing completion.

Ivanna Vladkova Hollar, the IMF mission chief for Egypt, said both sides had made "excellent progress" on the discussions of a comprehensive policy package that could kickstart long-delayed reviews of the country's economic reform program.

"To this end, the IMF team and the Egyptian authorities have agreed on the main policy elements of the program. The authorities expressed a strong commitment to act promptly on all critical aspects of Egypt's economic reform program," Hollar said in a statement.

Earlier on Thursday, IMF Managing Director Kristalina Georgieva said the fund and Egypt were in the "very last stretch" of negotiations to increase the country's $3 billion program.

Egypt has been in talks for the last two weeks with the IMF to revive and expand the loan agreement, which was signed in December 2022.

IMF disbursements on the loan were put on hold last year after Egypt did not follow through on a pledge to let the Egyptian pound respond to market forces, and instead fixed it against the dollar in March.

The Egyptian pound, fixed at 30.85 to the dollar since then, has been trading on the black market as low as 71 pounds.

Hollar, who concluded a two-week visit to Cairo on Thursday, said discussions will continue virtually in the coming days to "identify the magnitude of additional support from the IMF and other bilateral and multilateral development partners needed to help close Egypt's increased financing gaps in the context of recent shocks."



Egypt Completes Trial Run of New Suez Canal Channel Extension

An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
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Egypt Completes Trial Run of New Suez Canal Channel Extension

An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)
An Egyptian navy vessel see in the Suez Canal, March 30, 2021. (AFP/Getty Images)

Egypt said on Saturday it had successfully tested a new 10 km channel near the southern end of the Suez Canal.

The Suez Canal Authority said in a statement that during a trial run two ships passed through a new stretch of the canal's two-way section without incident.

Following the 2021 grounding of the container ship Ever Given that blocked the vital waterway for six days, Egypt accelerated plans to extend the second channel in the southern reaches of the canal and widen the existing channel.

Its revenue from the waterway, the gateway to the shortest route between Europe and Asia, has nevertheless tumbled since Yemen's Houthi militias began attacking ships in the Red Sea in November 2023 in what they say is solidarity with Palestinians in Gaza.

Egyptian President Abdel Fattah al-Sisi said on Thursday that due to "regional challenges", the country had lost approximately $7 billion in Suez Canal revenue in 2024, marking more than a 60% drop from 2023.

According to the Suez Canal Authority, the latest expansion extends the total length of the canal's two-way section to 82 km from a previous 72 km. The canal is 193 km long in total.

"This expansion will boost the canal's capacity by an additional 6 to 8 ships daily and enhance its ability to handle potential emergencies," the Suez Canal Authority said in its statement.

Earlier this year, Egypt said that it was considering an additional expansion project separate to the 10 km channel extension.