Gerry Rice, Director of Communications at the International Monetary Fund (IMF) said that the fund is expected to reach an agreement with Egypt very soon.
The negotiations with the IMF over the Extended Fund Facility started in March. One of the stumbling blocks in the talks was the exchange rate of the Egyptian Pound against the US dollar.
“IMF staff and the Egyptian authorities have held very productive in-person discussions on the margins of the IMF and World Bank Annual Meetings and made substantial progress on all policies, the IMF said in a statement.
It added that a continued fiscal consolidation path will safeguard public debt sustainability and ensure a steady decline in the debt-to-GDP ratio over the medium term. Additional fiscal and related structural policies would further expand the social safety net for the most vulnerable, improve the budget composition, and enhance fiscal transparency.
“Monetary and exchange rate policies that would anchor inflation expectations, improve monetary policy transmission, improve the functioning of the foreign exchange market, and bolster Egypt’s external resilience. This would enable Egypt to gradually and sustainably rebuild foreign reserves.
“The implementation of the authorities’ comprehensive structural reform agenda would gradually enhance the competitiveness of the economy, reduce the role of the state in the economy, level the playing field for the private sector, improve the business climate, and foster transition towards a greener economy.
“IMF staff and the Egyptian authorities have agreed to finalize their work to reach a Staff-Level Agreement very soon.”