Egypt reaches $4.8bn loan agreement with IMF

Egypt reaches $4.8bn loan agreement with IMF

Egypt has reached a staff-level agreement with the International Monetary Fund's technical team, currently on a visit to Cairo, for a $4.8 billion loan, the fund announced Tuesday Al Ahram online reported.

The agreement is expected to open the door to some $14.5 billion in financing to allow Egypt to implement an economic programme that it has proposed to the IMF.

The IMF said in a statement that agreement had been reached for "a 22-month Stand-By Arrangement (SBA) in the amount of about $4.8 billion (equivalent to about 3.16 billion SDR [Special Drawing Rights], or 335 per cent of Egypt's quota in the IMF)."

The loan proposal will be presented to the IMF's board of directors for final approval on 19 December, according to Hany Kadry, assistant to Egypt's finance minister who is responsible for IMF negotiations.

The first tranche of the loan is expected to be disbursed immediately after the board's approval is secured.

The loan will bear an interest rate of 1.06 per cent. Additional fees will also be attached to the facility, Reuters reported.

An IMF technical team arrived in Cairo some two weeks ago to discuss Egypt's economic programme, which will accompany the loan agreement.

To date, the Egyptian government has not disclosed any details of the programme.

Ashraf El-Arabi, Egypt's minister of planning and international cooperation, said the government would announce details of the loan on Wednesday.

The IMF, for its part, described what Egypt could expect following finalisation of the loan agreement.

"The [Egyptian] authorities' programme will be supported by a financing package of $14.5 billion in loans and deposits on favourable terms from a range of bilateral and multilateral partners, including the IMF," Andreas Bauer, chief of the IMF's Middle East and Central Asia department, said in a Tuesday statement.

To cover its widening budget deficit, Egypt currently borrows from the local market at rates as high as 15 or 16 per cent.

Fiscal consolidation is a "key pillar" of the economic programme, which would be carried out by instituting tax reforms and restructuring subsidies, according to the IMF.

Egypt's cabinet said in a statement on Tuesday that its programme aimed to cut the budget deficit to 8.5 per cent of GDP by 2013/14, down from the 11 per cent expected in the current 2012/13 fiscal year.

"The top tax rate will not change, but new tax brackets will be added and the exemption level will increase," the finance ministry's Kadry told Ahram Online.

Earlier this month, Egypt's cabinet approved a new tax bracket of 22 per cent for annual incomes between LE1 million and LE10 million.

Kadry explained that the other main feature of Egypt's economic programme was its focus on cutting fuel subsidies, a policy that the current cabinet has discussed intensively since its appointment this summer.

As for monetary policy, Kadry declined to comment, saying the matter was in the hands of the Central Bank of Egypt.

The IMF did not reveal any details of the proposed monetary measures, including the prospect of a possible devaluation of the Egyptian pound.

"Monetary and exchange rate policies will be geared towards ensuring declining inflation over the medium term; enhancing Egypt's international competitiveness to stimulate trade and attract capital inflows; and increasing international reserves to protect against external shocks," the IMF statement read.

Subscribe to Trend in Google News! Subscribe
Six servicemen returned by Azerbaijan arrested in Armenia
Six servicemen returned by Azerbaijan arrested in Armenia
EU welcomes welcomes willingness of Armenia and Turkey to work on normalization of their relations
EU welcomes welcomes willingness of Armenia and Turkey to work on normalization of their relations
Armenia creates working group for construction of section of Zangezur corridor
Armenia creates working group for construction of section of Zangezur corridor
Loading Bars
Latest
Iran, Russia reach agreements in oil and gas sector, says minister
Children over 5 years old allowed to be vaccinated against coronavirus in Uzbekistan
Ankara expects to host Putin-Zelensky meeting - Erdogan
Turkey, Qatar agree on ensuring security at Kabul airport
Turkish Parliament speaker pays tribute to memory of martyrs of Azerbaijan's January 20 tragedy
Georgia slightly decreases imports of petroleum gases from Azerbaijan
US will keep probing diplomats’ health incidents: Blinken
Georgia shares data on cement imports from Azerbaijan
Kazakhstan Railways opens tender to buy spare parts
Azerbaijan's metallurgical production increases
Cost of manufactured computers up in Azerbaijan
Central Bank of Turkey makes decision on key rate
President Ilham Aliyev receives Advisor to French President's Cabinet and EU Special Representative for South Caucasus (VIDEO)
January 20 tragedy laid foundation for Azerbaijanis' struggle to restore their statehood and independence
Azerbaijan shares data on number of vaccinated citizens
Price indexes of industrial, trade sectors at Uzbek stock exchange rise
Azerbaijan confirms 1,186 more COVID-19 cases, 582 recoveries
Turkish VP tweets about anniversary of Azerbaijan's January 20 tragedy
Kazakhstan talks persons not eligible for support on loan deferrals, write-offs
Uzbekistan’s Bukhara oil refinery discloses volume of its production in 2021
Turkmen enterprise releases its first tablets and smartphones
Azerbaijan is beneficiary of recovery trend in hydrocarbon market - Gazprombank
Technical specifications of Azerbaijan’s Khizi-Absheron power plant revealed
Uzbek Central Bank makes decision on its main rate
Azerbaijan boosts oil exports to Georgia
State Statistics Committee discloses cost of machinery, equipment produced in Azerbaijan
Cars re-export from Georgia to Azerbaijan increases
Uzbekistan’s gas chemical complex reveals volume of its products for 2021
Kazakhstan unveils value of vehicles insurance over 11M2021
Kazakhstan reports increase in monetary base value
Kazakhstan's first president to retain right to speak at parliament and government
Azerbaijani Executive Power in Baku opens tender for purchase of truck spare parts
Tesla Berlin factory to elect works council on Feb 28
Kazakhstan to introduce two alternative ways to repay deferred payments
Introducing hydrogen as energy carrier can raise energy security risks
Impact of large-scale protests in Kazakhstan yet to play out - WoodMac
Azerbaijan's State Agency for Use of Mineral Resources opens tender on survey services
India’s cumulative COVID-19 vaccination coverage exceeds 158.88 Cr
PM Modi to host first ever India-Central Asia Summit in virtual format on Jan 27
Indian NSE world’s largest derivatives exchange for 3rd straight year
Artel launches Innovative Educational Center in Tashkent
Uzbekistan shares data on industrial production in 2021
Events held in Azerbaijani army, dedicated to January 20 tragedy (PHOTO)
Guides to accompany passengers of bus trips to Azerbaijan’s liberated Aghdam, Shusha cities
Can hydrogen market be cartelized?
Azerbaijani NBCO eyes boosting car loan portfolio
Memory of January 20 tragedy victims honored in Azerbaijan's Shusha (VIDEO)
Indian economic recovery yet to attain durability: Icra
Russia records another 38,850 coronavirus cases, highest daily number since Nov 13
PM to launch India-assisted projects with Mauritius counterpart Jugnauth today
Rapid growth of hydrogen to underpin rising demand for nickel, zirconium
Azerbaijani State Border Service to purchase building materials via tender
Iran’s CBI discloses data on balance of bank loans
Uzbek Statistics Committee reveals amount of construction work done in 2021
Azerbaijan's minister of health talks quarantine regime
Turkmen garment factory ramps up production
Iran reveals COVID-19 data for January 20
IEA expects Azerbaijan to increase oil output in 2022
Turkish MoD shares publication on anniversary of January 20 tragedy in Azerbaijan
Work related to Armenia's environmental crimes in Azerbaijan's Karabakh in progress - ministry
Iran’s Bahar Azadi gold coin price continues to rise
Turkish, Armenian special reps to discuss confidence-building measures - FM
IEA evaluates Azerbaijan’s OPEC+ compliance
Kazakhstan crude and condensate production estimated to go up in 2022
European Hydrogen Backbone joined by six more companies
Swiss Expo inks solar power purchase agreement in Poland
Кazakh Electricity Grid Operating Company opens tender to buy spares for vehicles
Turkmenbashi refinery opens tender to purchase necessary equipment
EBRD to allocate loan for Turkey’s renewable energy sector
Azerbaijan develops action plan to provide liberated areas with internet
Georgia shares data on trade turnover with Azerbaijan
Russian MFA talks about expansion of transport corridors within GUAM
Recognise ‘Hinduphobia’ and violence against Buddhists, Sikhs too: Indian envoy to U.N.
Work related to Armenian crimes against Azerbaijanis continues - Prosecutor General
Momentum in India's favour, need to prevail over COVID-19: Deloitte CEO on economic development
Central Bank of Iran shares data on exchange of bank checks countrywide
Proud to hold TEKNOFEST int'l aviation, space, technology festival in Azerbaijan - Turkish Baykar Makina
EU special rep for South Caucasus to visit Azerbaijan
Iran boasts potential to vastly increase exports to Russia
India extends suspension on international flights till February 28
Kazakh Gas Processing Plant opens tender to buy electric engines
Companies from UAE, Netherlands to build solar photovoltaic stations in Uzbekistan
Israel signs $3.4 bln submarines deal with Germany's Thyssenkrupp
Azerbaijan eyes holding clinical trials of Turkovac COVID-19 vaccine soon
Turkmen state concern to purchase material and technical resources via tender
Georgia names main goods in domestic exports in 2021
Azerbaijani minister talks potential omicron infection rate among local COVID-19 patients
Azerbaijani people honor memory of victims of January 20 tragedy (PHOTO/VIDEO)
Iranian banks issue big loans in services sector
UN Resident Coordinator in Azerbaijan expresses condolences in connection with January 20 tragedy
Ambassador of Kazakhstan to Azerbaijan honors memory of victims of January 20 tragedy (PHOTO)
Uzbek association signs agreement with Russian enterprises to develop textile industry
Inflation accelerating worldwide: How Azerbaijan responds?
Azerbaijan honors memory of martyrs of January 20 tragedy by minute of silence (PHOTO/VIDEO)
Turkish embassy in Azerbaijan shares publication on 32nd anniversary of January 20 tragedy
Turkmenistan's TML eyes co-op with Ukraine's Smart Maritime Group
Uzbekistan to strengthen cooperation with Saudi company in energy field
Leadership of Azerbaijani MoD visits Alley of Martyrs (PHOTO)
Georgia’s revenues from tourism to surge in 2022 – Galt & Taggart
Iran provides several loans in trade sector
All news