IMF Agrees $12 Billion Loan To Boost Egypt Economy

CAIRO, (APP - UrduPoint / Pakistan Point News - 11th August, 2016) : The International Monetary Fund said Thursday that it had reached an initial agreement to lend $12 billion to Egypt to bolster an economy battered by years of unrest. The Egyptian government hopes the three-year deal will provide a lifeline for the North African nation as it grapples with a Dollar shortage and dwindling foreign reserves. The agreement, which will have to be ratified by the IMF and Egyptian authorities, will require Cairo to undertake economic reforms. "Egypt is a strong country with great potential but it has some problems that need to be fixed urgently," the head of the IMF delegation to Egypt, Chris Jarvis, said in a statement.

Jarvis told reporters that the IMF was looking to Egypt's parliament to pass a law introducing a value-added tax. The IMF's Extended Fund Facility is aimed at countries with payment imbalances and tepid growth to aid structural reforms, according to the fund's website. Analysts have said the IMF also pushed for a more flexible exchange rate for the Egyptian pound, which the government has been propping up amid capital controls. The dollar shortage has affected imports and created a flourishing black market trade that the government fought unsuccessfully.