CAIRO – 27 April 2020: The Egyptian government and the Central Bank have requested a financial package from the International Monetary Fund (IMF), according to the Rapid Funding Tool program (RFI) and the SBA program, Prime Minister Mostafa Madbouli announced Sunday.
This package is to enhance the state’s capabilities to face the new COVID-19 virus crisis, in a proactive step based on the successful implementation of the economic reform program; to maintain the continuing gains and positive results achieved by the Egyptian economy, in light of the exceptional circumstances experienced by all countries of the world and developments in global conditions.
Madbouli added in a press conference that the government started discussions with IMF to obtain financial support besides the technical one, noting that his government works in parallel to maintain the Egyptian economy with measures to face coronavirus.
“We target to avoid any negative repercussions that affect the Egyptian economy,” he clarified.
The Premier said that the economic reform program helped the government in facing COVID-19 (coronavirus).
For his part, Governor of Egypt's Central Bank Tarek Amer stated that Egypt's new financial program with IMF lasts for a year.
Amer said that Egypt's economy is flexible in terms of obtaining international funding to compensate loss occurred in some sectors due to COVID-19.
“IMF's board is very excited with the new package due to the success of the previous program Egypt obtained,” Amer revealed.
As per banking sector, he said that the sector has been prepared well over the past years, and it was able to withstand well during the current crisis.
Amer noted that Egypt has foreign reserves that exceed its people needs, pointing out that the volume of foreign reserves will help in meeting the Egyptian economy needs during the coming years without disturbances.
‘We have capital of more than LE 450 billion in banks,” he said.
“The deal with IMF has technical and financial parts with the aim to maintain the confidence of the market and positives and gains of economic reform program,” Minister of Finance Mohamed Ma’it said.
Ma’it clarified that the economic reform program has been praised by all economic institutions and it saved a good financial extent for the government and the economy.
‘We were able to absorb big part of current crisis,” he added.
Meanwhile, Minister of Planning Hala el-Saeed said that sectors that are affected by the lockdown are information and communication technology (ICT), agriculture, some of the industrial sectors, clarifying that the government pumped large investments in ICT sector.
“Egypt will record growth rate of 4.2 percent by the end of 2020,” Saeed announced.
As per Minister of International Cooperation, she said that her ministry sought coordination and cooperation with various multilateral and bilateral institutions, clarifying that funds that come from large international institutions are the least costly.
In November 2016, the Executive Board of the IMF approved a $12 billion loan as a financial assistance to Egypt to support the Egyptian economic reform program.
Upon the board's approval in November, Egypt embarked on a bold economic reform program that included floating its currency, losing around 50% of its value, as part of the economic reform program which imposed taxes, including the value-added tax (VAT), and cut energy subsidies, all with the aim of trimming the budget deficit.