The International Monetary Fund said it’s in “close engagement” with Egypt to set the dates for discussing a much-delayed review of a $3 billion rescue program, citing recent progress on reforms.
(Bloomberg) — The International Monetary Fund said it’s in “close engagement” with Egypt to set the dates for discussing a much-delayed review of a $3 billion rescue program, citing recent progress on reforms.
“Our discussions are very much focused on making sure that Egypt succeeds,” Managing Director Kristalina Georgieva told reporters Thursday at the lender’s annual meetings in Morocco.
“Egypt has made good progress on a number of fronts,” she said. “Fiscal policy, the implementation of privatization strategy, the engagement with our team on how to best conduct monetary policy in these very challenging times.”
The IMF has yet to complete reviews initially scheduled for March and September, with Egypt’s currency management remaining the main stumbling block. Mired in its worst economic crisis and foreign-exchange crunch in decades, Egypt has devalued its currency three times since early 2022, with the pound losing almost half its value against the dollar.
Georgieva said in a Bloomberg interview last week the country would “bleed” precious reserves unless it devalues again. But presidential elections in December, in which President Abdel-Fattah El-Sisi is likely to extend his rule until 2030, make a currency move before the vote a difficult proposition.
Read More: IMF Boss Says Egypt to ‘Bleed’ Reserves Unless It Devalues
Finance Minister Mohamed Maait told CNBC Arabia on Wednesday that Egypt expects an announcement on the IMF review by the end of 2023.
On another contentious issue, there’s been apparent progress, with the IMF hailing signs of Egypt loosening its grip on the economy. Investors, the World Bank and IMF have long complained of private enterprise being crowded out by state entities, including the army.
“There is certain progress made on some of those fronts, on increasing the role of the private sector,” Jihad Azour, IMF director for the Middle East, North Africa and Central Asia, said in a separate interview before the Morocco meetings.
He didn’t give further details. Egypt has announced the sale of more than $2 billion of state-held assets in the past three months.
Private enterprise needs to be brought to “center stage by providing at least the same level playing field with the public sector and by improving the overall access of foreign currency,” Azour said.
Maait told CNBC a second phase of state-asset sales targets as much as $5 billion in deals by the end of June.
Even with the economy mired in crisis, the IMF’s latest projections see it growing 4.2% this year, with expansion slowing to 3.6% in 2024.
“We are combining the first and the second review and when we get there, it means that strong progress has been achieved,” Azour said.
–With assistance from Mirette Magdy.
(Updates with Azour’s comments starting in eighth paragraph.)
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