A 12-month Stand-by Arrangement (SBA) for Egypt was approved by the executive board of the International Monetary Fund (IMF), with access equivalent to SDR3.76bn (about USD5.2bn or c185% of quota) to address balance of payments financing needs arising from the COVID-19, it announced in a press release. The approval of the SBA for Egypt enables the immediate disbursement of about USD2bn, and the remainder will be phased over 2 reviews, it added. The new arrangement aims to help Egypt cope with challenges posed by the COVID-19 pandemic by providing Fund resources to meet Egypt’s balance of payments needs and to finance the budget deficit. The Fund-supported program would also help the authorities preserve the achievements made over the past 4 years, support health and social spending to protect vulnerable groups, and advance a set of key structural reforms to put Egypt on a strong footing for sustained recovery with higher and more inclusive growth and job creation over the medium term. (IMF)
HC’s Comment: The USD5.2bn SBA will bring Egypt’s total recently secured external financing to USD13.0bn, including the USD2.8bn Rapid Financing Instrument (RFI) from IMF and the USD5.0bn proceeds from the recent Eurobond issuance, which will help in closing the Egyptian banking sector net foreign liability position and support the balance of payment (BOP).