© Reuters. FILE PHOTO: A general view of the Cairo skyline during sunset, with cold and foggy weather across the country, Cairo, Egypt, February 2, 2023. REUTERS/Amr Abdallah Dalsh
CAIRO (Reuters) – Egypt and the International Monetary Fund have yet to agree on a date for the initial review under a $3 billion financial package signed in December, an IMF official said on Thursday, a sign that the lender could be increasingly frustrated by Cairo’s lack of resources. of reforms.
In December, the IMF approved a $3 billion Extended Fund loan for Egypt, which has been under severe financial pressure since longstanding economic problems were exposed by the economic fallout from the war in Ukraine.
Disbursements under the 46-month program are subject to eight reviews, the first of which dates from March 15, 2023, in an IMF staff report published in December.
“We are in regular dialogue with the authorities to prepare for the first review… Preparations have started and when we and the authorities are ready, we will announce the date,” said Jihad Azour, director of the IMF’s Middle East and Central Asia Department. . he said at a press conference.
He said that among the priorities were for Egypt to adopt a flexible exchange rate, reduce inflation through the use of monetary policy instruments, especially interest rates, and open up more space for the private sector by leveling the playing field with business. state.
“Egypt really needs to show some meaningful steps to rebuild trust and show that the process has started,” said ADCB’s Monica Malik. “It is better to start the review once there are tangible signs of process with reforms, including on a flexible currency.”
The official exchange rate of the Egyptian pound has been almost unchanged for more than a month at around 30.93 to the dollar, despite a central bank promise in October to let supply and demand determine its price. .
Banks and businessmen continue to complain of severe currency shortages, and the black market price of the pound has fallen to around 36.00.
In its December deal with the IMF, Egypt also promised to sell billions of dollars worth of state assets over the next four years.
It has not made any major sales since signing, although the central bank has raised its overnight interest rates by 500 basis points.
“Egypt has made important reforms in recent years, and the fund has been very supportive…,” Azouri said. “We still support Egypt’s reform agenda.”