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Cairo received a shot in the arm this week when the IMF agreed to release the second $1.25bn installment of a $12bn loan agreed last August.
Once approved by the IMF’s Executive Board, this would bring total disbursements to $4bn as part of the three-year extended fund facility (MEES, 19 August 2016).
One of the conditions set by the IMF was the flotation of the Egypt pound, which had previously been pegged to the US dollar at $1=E£8.8. The currency has since more than halved in value, currently trading at $1=E£18, pushing the inflation rate to 33% in April.
Reducing inflation is a “key priority for safeguarding the welfare of people across Egypt. We support [Cairo’s] objective to bring down the rate of inflation to single digits over the medium term,” IMF Mission Chief Chris Jarvis says, whilst also praising “the great efforts the government and the CBE have been making to reform the economy.” (CONTINUED - 906 WORDS)