Financial crisis in Egypt: the IMF puts 3 billion dollars in the fund
In Egypt the pound was devalued by 16% on 27 October.
It had already lost 20% of its value against the dollar.
The bill is painful for Egyptians (bread seller in the Old Cairo district of Cairo in Egypt, March 2022).
© Amr Nabil/AP
Text by: RFI Follow
2 mins
The International Monetary Fund is granting Egypt a three billion dollar loan over the next four years.
A loan intended to restore the stability of Egyptian public finances and to fight against galloping inflation.
In exchange for this program, the Egyptian authorities allowed the pound to devalue by sixteen percent.
Advertising
Read more
Curbing imports, restoring the balance of payments, stabilizing the currency, this is what the IMF expects from the Egyptian authorities in exchange for its financial support.
The recipe is classic, it is no less painful for consumers.
With the devaluation, they see the prices of imported products become more expensive and their wallets, already burdened by fifteen percent inflation, empty a little more.
►
Also to listen
: How Egypt seeks to escape the domination of the dollar
Yet Cairo had no other choice.
Since the beginning of the year, Egypt has suffered a series of external shocks.
The war in Ukraine has caused the cereal bill to jump and the rise in American interest rates has sucked up the capital invested in the country.
On March 21, the pound had lost 17% of its value in one day.
With this new devaluation, it plunged in seven months by 47%, from 15.6 to 23 pounds for the dollar at the close on Thursday.
►
To read also:
in
Egypt, the fear of a devaluation of the pound causes a gold rush
Cairo can however congratulate itself on having convinced its partners to lend a hand.
Because in addition to the three billion from the IMF is added another billion from a development fund of the institution, and especially five billion granted by various international organizations.
Egypt is one of the five countries in the world most at risk of not being able to repay their foreign debt, currently more than 150 billion euros, according to the rating agency Moody's.
Despite this complicated financial situation, the Egyptian economy is showing resilience.
Industry and new technologies in particular are doing well.
And among the major African economies, Egypt will be the one that will grow the most this year, according to economists.
►
To read also
: in Egypt, the presidency offers itself a new plane at 500 million euros in the midst of an economic crisis
(with AFP)
Newsletter
Receive all the international news directly in your mailbox
I subscribe
Follow all the international news by downloading the RFI application
Egypt
finance