IMF approves deal with Egypt for $3 billion support package

The International Monetary Fund has approved a deal that will provide a $3 billion support package to cash-strapped Egypt over a period of almost four years, with the agreement expected to draw in additional $14 billion in financing for the Middle East country.

The announcement from the IMF's executive board late on Friday comes after a preliminary agreement was reached in October between Egypt and the fund, hours after Egypt's central bank introduced a series of reforms, including a hike in key interest rates by roughly 2 percentage points.

The Egyptian economy has been hard-hit by the coronavirus pandemic and the war in Ukraine, events that have played havoc with global markets and hiked oil and food prices worldwide. Egypt is the world’s largest wheat importer, most of which came from Russia and Ukraine. The country’s supply is subject to price changes on the international market.

The deal — known as an Extended Fund Facility Arrangement — is expected to cover a period of 46 months and will give the Egyptian government immediate access to about $347 million, which will help the debt-ridden economy nation bolster its balance of payments and budget, the IMF said.

For decades, most Egyptians have depended on the government to keep basic goods affordable through state subsidies and other similar schemes. About a third of Egypt’s 104 million people live in poverty, according to government figures.