Egypt secures $8 billion IMF loan

Egypt announced on Wednesday that it had reached an agreement with the International Monetary Fund (IMF) to obtain an $8 billion bailout loan, in a bid to stabilize its ailing economy.

Egyptian Prime Minister Moustafa Madbouly confirmed the agreement in a televised address on Wednesday, ending months of negotiations with the IMF. Egypt had already benefited from a $3 billion loan from the IMF in 2022, and the $8 billion increase aims to strengthen the country's foreign exchange reserves and attract foreign investment.

The agreement with the IMF required austerity measures, including an increase in the main interest rate by the Egyptian Central Bank and the liberalization of the Egyptian pound exchange rate. Shortly after the announcement, the Egyptian pound lost more than 60% of its value against the dollar, reflecting market adjustments following the measures.

The Central Bank's decision to increase its main interest rate by 600 basis points to 27.75 percent aims to control inflation and stabilize the national currency. The initiative is part of the Egyptian government's efforts to overcome persistent economic challenges, including the fallout from the coronavirus pandemic and geopolitical unrest in the region.

Egypt's economy has been hit hard by a series of crises, including the coronavirus pandemic, regional tensions, the war in Ukraine and recent clashes between Israel and Hamas in Gaza. As the world's largest importer of wheat, Egypt has been particularly vulnerable to commodity price fluctuations in the global market.

But despite ongoing challenges, Egypt remains committed to restoring economic stability and promoting long-term growth.