US Treasury’s Yellen pledges support for Egypt amid IMF loan talks

By Andrea Shalal and David Lawder

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen pledged U.S. support for Egypt’s economy and reforms after meeting with the North African nation’s authorities on Tuesday in Washington amid talks over expanding Egypt’s $3 billion International Monetary Fund loan program.

The Egyptian officials, including the country’s finance minister and central bank governor, also were due to meet with IMF Managing Director Kristalina Georgieva during their visit to Washington on Tuesday, an IMF spokesperson said, without providing further details.

The high-level meetings come as U.S. Secretary of State Antony Blinken visits the Middle East and works to prevent the Israel-Gaza war from expanding into a wider regional conflict.

Georgieva told Reuters in November that the IMF was “seriously considering” augmenting Egypt’s $3 billion loan program as the country struggles with the economic impact from Israel’s invasion of Gaza.

Already facing high foreign debt levels, Egypt has been hit hard by the war in the neighboring Gaza Strip, which threatens to disrupt tourism bookings and natural gas imports, as well as recent attacks on Red Sea ships.

A statement from Treasury said that Yellen discussed challenges to Egypt from the Gaza war during her meeting with Egyptian Finance Minister Mohamed Maait, Minister of International Cooperation Rania Al-Mashat, and Central Bank of Egypt Governor Hassan Abdalla.

“Secretary Yellen underscored strong United States support for Egypt and its economic reform program. She underscored the goal of bolstering Egypt’s economy and supporting inclusive, sustainable growth,” the Treasury said.

Egypt’s $3 billion loan program agreed with the IMF in December 2022 faltered after the North African country failed to let its currency float freely or make progress on the sale of state assets.

The IMF, in which the U.S. is the largest shareholder, delayed disbursements of about $700 million expected in 2023, but in December said it was in talks to expand the $3 billion program given economic risk from the Israel-Gaza war.

A spokesperson for Egypt’s embassy in Washington could not be reached for comment.

(Reporting by Andrea Shalal and David Lawder; Editing by Chizu Nomiyama, Jonathan Oatis and Muralikumar Anantharaman)