Cairo 24 has reported a significant development in Egypt's economic reform efforts, as the country has reached a tentative agreement with the International Monetary Fund (IMF) on a revised loan program. This new accord includes an immediate devaluation of the Egyptian pound and an increase in the program's value from $3 billion to $7 billion or more. The preliminary deal's details are being prepared for review by Egypt's political leadership.
According to information from Al Hadath channel cited by the website, a key feature of the drafted program is the urgent devaluation of the Egyptian pound. The measure aims to curb the growing disparity between the official and parallel market dollar rates, although no specific timeline for this adjustment has been disclosed.
Economic expert Ali Al-Idrissi affirmed that there has been a significant delay in implementing economic reforms under Egypt's second program with the IMF, especially following what was considered a successful initiative in 2016.
Al-Idrissi noted that hesitation in adopting economic reform decisions and the political leadership and government's concerns over devaluing the Egyptian pound have led to an increased reliance on the parallel market. This has pushed the demand for the dollar, with exchange rates nearing 70 Egyptian pounds to the dollar, indicating a vast gap between parallel and official market rates.
Al-Idrissi pointed out that had Egypt decided to float the pound at least a year ago, it would have maintained the credit ratings of its banks and the national economy. It would also have secured the confidence of investors and international institutions while stabilizing the dollar exchange rate and achieving financial stability. The delayed decision, he suggests, has cost Egypt billions of dollars.
The Egyptian government is now poised to present this preliminary agreement to its political echelons, potentially marking a turning point in the country's economic trajectory. The IMF's expanded support signifies a bolstered effort to stabilize Egypt's economy and regain investor confidence amidst challenging fiscal circumstances.
