IMF Stands Firm on Egypt’s $8 Billion Loan Program
WASHINGTON: In a recent statement, the International Monetary Fund reaffirmed its support for Egypt’s $8 billion loan program, deeming it “still appropriate.” The organization stressed the urgent need to assess the effectiveness of Egypt’s social protection initiatives amidst escalating regional challenges.
Egypt Warns of Reconsidering Loan Program
Egyptian President Abdel Fattah El-Sisi issued a warning that the nation might have to rethink its extended loan program if international institutions do not acknowledge the exceptional difficulties Egypt is currently facing. The support package, implemented in March, requires Egypt to slash subsidies on fuel, electricity, and other essential goods, sparking public unrest.
IMF Director Emphasizes Collaboration on Social Protection
Jihad Azour, IMF Director for the Middle East and Central Asia, underlined the importance of working closely with Egyptian authorities to improve the efficiency and coverage of social protection programs. He highlighted this as a top priority for discussion with the managing director, emphasizing the necessity of maintaining currency exchange rate flexibility as per the loan agreement.
IMF Managing Director to Visit Egypt
IMF Managing Director Kristalina Georgieva announced plans to travel to Egypt in the next 10 days to personally assess the country’s challenging economic situation and reinforce the commitment to reform measures. She noted the significant impact of conflicts in Gaza, Lebanon, and Sudan on Egypt’s economy, leading to a substantial decline in Suez Canal revenues.
BRICS Payments System Proposal
Georgieva also addressed the proposed alternative cross-border payments system by BRICS nations, stating the need for more details to evaluate its potential impact. She dismissed any immediate threat to the IMF, emphasizing that while member states may form various alliances, they all continue to support the organization.
BRICS Nations Pledge Cooperation
Leaders from Brazil, Russia, India, China, and other BRICS nations recently committed to enhancing cooperation on cross-border payments, grain exchanges, and other initiatives during a summit in Russia. Georgieva acknowledged the concept of a payment system among a group of countries but called for more specifics before assessing its implications.