IMF approves $820 million release for Egypt, calls for more reforms | WKZO | Everything Kalamazoo

By Kanishka Singh and Aidan Lewis

WASHINGTON (Reuters) – The International Monetary Fund said on Monday it has completed a review that allows Egypt to borrow $820 million. The fund said efforts to restore macroeconomic stability were starting to yield results but urged more progress on curbing state-owned enterprises.

It is the third revision under Egypt’s latest 46-month IMF loan program, which was approved in 2022 and expanded to $8 billion this year following an economic crisis marked by high inflation and severe foreign exchange shortages.

Egypt says it has moved to a flexible exchange rate regime, a policy the IMF said on Monday remains “a cornerstone of the authorities’ program.”

“Inflationary pressures are gradually easing, foreign exchange shortages have disappeared and fiscal targets (including those related to spending on large infrastructure projects) have been met,” the IMF said in a statement.

“While progress has been made on some key structural reforms, greater efforts are needed to implement the State Ownership Policy (SOP),” it added.

The Fund called on Egypt to accelerate a program of divestment from state-owned enterprises and implement reforms to prevent them from engaging in unfair competition practices.

It also said that Egypt, where falling natural gas production has led to daily power outages since last year, needs to limit fiscal risks from the energy sector.

“Restoring energy prices to cost-covering levels, including retail fuel prices by December 2025, is essential to support the smooth supply of energy to the population and reduce imbalances in the sector,” the IMF quoted its Deputy Managing Director Antoinette M. Sayeh as saying.

Egypt raised domestic fuel prices by 15% in preparation for the IMF review, which was postponed from July 10.

(Reporting by Kanishka Singh in Washington; Writing by Aidan Lewis; Editing by Leslie Adler and Chris Reese)