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Egypt Secures $5.2 Billion IMF Loan

Egypt Secures $5.2 Billion IMF Loan

Saturday, 27 June, 2020 - 05:30
FILE PHOTO: The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, US, as IMF Managing Director Christine Lagarde meets with Argentine Treasury Minister Nicolas Dujovne September 4, 2018. REUTERS/Yuri Gripas
Asharq Al-Awsat

The International Monetary Fund has approved a one-year $5.2 billion financing package for Egypt to help the country alleviate the economic impact of the coronavirus pandemic.

The new funding under a standby arrangement comes on top of $2.8 billion in emergency aid the IMF board approved a month ago, although at the time officials acknowledged that more help would be needed.

The IMF noted Friday that Cairo had "a strong track record" of implementing economic reforms under fund-supported programs over the past four years, and the new loan will help put it on strong footing for a recovery.

"Egypt was one of the fastest-growing emerging markets prior to the COVID-19 outbreak," the IMF said in a statement. "However, the significant domestic and global disruptions from the pandemic have worsened the economic outlook and reshuffled policy priorities."

The aid will focus first on health and social spending, as well as financial stability to keep a lid on inflation.

Fund staff agreed with authorities on the terms of the loan in early June, and said the funds also will open the doors to financing from other lenders and help support job creation by the private sector.

Egypt has suffered over 2,500 COVID-19 fatalities with over 61,000 cases, according to Johns Hopkins University's tally.

Starting next week, the government plans to gradually reopen society.

Restaurants, coffee shops, clubs and theaters will resume operations at 25 percent capacity, while mosques and churches will welcome worshippers after a three-month suspension. International flights will resume for tourism to destinations less hard-hit by the virus.

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