Egypt aims to finalize IMF deal in days, secures $16.3 bln financing

November 3, 2016 20:14
1 minute read.

Egypt hopes to finalize a $12 billion IMF loan program within days and has secured pledges worth $16.3 billion from G7 countries, China and Arab allies to plug this year's budget deficit, Central Bank Governor Tarek Amer said on Thursday.

Speaking hours after floating the Egyptian pound, Amer said there was no going back but that the central bank could intervene to control prices. He said inflation, which has reached multi-year highs around 14 percent, had likely peaked and would ease as pressure on the pound had faded.Egypt reached a preliminary deal with the IMF in August but has yet to clinch board approval for the three-year program, which also requires it to secure $5-6 billion in bilateral financing.

The IMF, which has long called on Egypt to shift to a more flexible exchange rate, welcomed the move but did not say if it was enough to seal the deal.

Amer said the central bank had provided $1.2 billion to banks to secure supplies of essential foods last month as part of efforts to protect the poorest from the impact of a devaluation.

The central bank was still targeting foreign reserves of about $25 billion by year-end. Reserves were about $19.5 billion in September.

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