Egypt expecting approval of IMF package next week-deputy minister

CAIRO (Reuters) – Egypt is expecting approval of a new $3 billion Extended Fund Facility package from the International Monetary Fund next week, Deputy Finance Minister Ahmed Kouchouk said on Wednesday.

Egypt’s finances remain fragile despite two major currency devaluations this year and the IMF package, which was announced in October as Egypt pledged to shift to “durable exchange rate flexibility” in line with long-standing IMF demands.

Since then, the gap between the black market exchange rate and the official rate has widened, raising speculation about the extent of exchange rate flexibility and the security of the IMF package.

Asked at a Euromoney conference in Cairo if it was correct to see the IMF executive board meeting scheduled for Dec. 16 to be effectively a formality, Kouchouk replied: “Very accurate.”

Egypt was expecting an initial drawdown on the IMF loan of $750 million by the end of the July-June fiscal year, which would allow Egypt to “mobilise also a very decent package from other multilateral development banks as well as from the market”, Kouchouk said.

But he added that the government’s focus was winning support for comprehensive economic reform.

“We believe that we have a very ambitious plan that is hinging around catalysing the private sector role, about engaging the private sector, getting more FDI, enhancing the competitiveness of our economy,” Kouchouk said.

“We think that the funding shouldn’t be the main issue.”

(Reporting by Aidan Lewis and Mahmoud Salama; Editing by Toby Chopra)