International Monetary Fund Managing Director Christine Lagarde said that the panel of experts at the international foundation had completed its fourth review of Egypt's economic performance under the reform program agreed upon by the two sides.
Lagarde said in a statement that the board will meet in coming weeks to discuss the review, adding that she will recommend that the Fund’s executive board approve the review of Egypt’s $12 billion loan program.
“The Egyptian authorities embarked on an ambitious economic reform program in 2016 that is being supported by an IMF financial arrangement,” she explained.
“Since then, Egypt has made substantial progress as evident in the success achieved in macroeconomic stabilization, Lagarde added, noting that the country’s growth rate is now among the highest in the region, the budget deficit is on a declining trajectory and inflation is on track to reach the Central Bank of Egypt's target by the end of 2019.
“Unemployment has declined to around 10 percent, which is the lowest since 2011, and social protection measures have been expanded," she stated.
“It is important to build on the progress achieved thus far and to press ahead with structural reforms that facilitate private sector-led growth and job creation, as well as measures to increase transparency and accountability that help improve governance.”
“This will help attain higher and more inclusive growth and will ensure better living standards for all Egyptians,” Lagarde noted.
Egypt signed a $12 billion-loan agreement with the IMF in November 2016.
Under the IMF-backed overhaul, the country has made deep cuts to energy subsidies, introduced new taxes and floated its currency in bid to kick-start economic activity, boost investor confidence and restore stability to capital markets.
In a recent interview with Bloomberg, Governor of the Central Bank of Egypt (CBE) Tariq Amer said that more volatility in exchange rates was likely to occur after the end of the mechanism that guaranteed investors to transfer their money abroad.
“We are committed to ensuring that the market is free to supply and demand, but at the same time we have reserves to help us counter any unregulated market practices,” Amer said.
“Reserves help us defend the new foreign exchange system, and the interest rate can be used as a tool,” he added.
