Tuesday, November 08, 2016

Egypt Has Secured $6 Billion Bilateral Financing Required for IMF Loan
Finance Minister Amr El-Garhy at a news conference in Cairo, Egypt August 11, 2016. REUTERS/Mohamed Abd El Ghany

Egypt has secured the $6 billion in bilateral financing required to secure a three-year, $12 billion IMF lending program, Finance Minister Amr El-Garhy said on Tuesday.

In August, the IMF agreed in principle to grant Egypt the loan to support a government reform program aimed at reducing its budget deficit and balancing its currency market.

The IMF board is set to discuss final approval of the program on Friday and IMF managing director Christine Lagarde said she would recommend board approval.

An initial disbursement of $2.75 billion may come as early as next Tuesday, a finance ministry official told Reuters.

Clinching the IMF deal would be a milestone in Egypt's efforts to revive an import-dependent economy that has struggled to attract foreign currency inflows since a 2011 uprising scared off tourists and foreign investors.

Facing a 12 percent budget deficit, plummeting foreign exchange reserves and a burgeoning black market for dollars, Egypt has embarked in recent years on a program of painful economic reform and turned to the lender for support.

As part of the bilateral financing required ahead of the IMF loan, Egypt has reached final agreement on a $2.7 billion currency swap with China that requires "only administrative procedures" to complete, Garhy said in a phone interview with Egyptian television channel CBC.

The rest of the financing has come from the World Bank, the United Arab Emirates and Saudi Arabia, he said.

"Yesterday the central bank governor and I sent the letter of intent. This was the document we still needed to send to complete the procedures," he said.

(Reporting by Ali Abdelaty; Writing by Eric Knecht; Editing by Hugh Lawson)

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