CAIRO (REUTERS) - Egypt has secured the US$6 billion (S$8 billion) in bilateral financing required to secure a three-year, US$12 billion IMF lending programme, Finance Minister Amr El-Garhy said on Tuesday (Nov 8).
In August, the IMF agreed in principle to grant Egypt the loan to support a government reform programme aimed at reducing its budget deficit and balancing its currency market.
The IMF board is set to discuss final approval of the programme on Friday and IMF managing director Christine Lagarde said she would recommend board approval.
An initial disbursement of US$2.75 billion may come as early as next Tuesday (Nov 15), a finance ministry official told Reuters.
Clinching the IMF deal would be a milestone in Egypt's efforts to revive an import-dependent economy that has struggled to attract foreign currency inflows since a 2011 uprising scared off tourists and foreign investors.
Facing a 12 per cent budget deficit, plummeting foreign exchange reserves and a burgeoning black market for dollars, Egypt has embarked in recent years on a programme of painful economic reform and turned to the lender for support.
As part of the bilateral financing required ahead of the IMF loan, Egypt has reached final agreement on a US$2.7 billion currency swap with China that requires "only administrative procedures" to complete, Garhy said in a phone interview with Egyptian television channel CBC.
The rest of the financing has come from the World Bank, the United Arab Emirates and Saudi Arabia, he said.
"Yesterday the central bank governor and I sent the letter of intent. This was the document we still needed to send to complete the procedures," he said.