Fitch expects to provide financial relief to Egypt with UAE partnership, possible IMF assistance


(MENAFN) In a recent statement, credit rating agency Fitch highlighted the significance of the USD35 billion Ras El Hekma project agreement between Egypt and the United Arab Emirates (UAE) in alleviating external liquidity constraints for Egypt. Fitch underscored that this collaboration could also pave the way for adjustments in the exchange rate, a move deemed favorable for potential International Monetary Fund (IMF) assistance.

According to Fitch, the adjustment of the exchange rate holds promise in incentivizing the IMF to endorse an enhanced support program for Egypt, a development eagerly awaited by Egyptian authorities. This sentiment was echoed by Kristalina Georgieva, Director of the IMF, who indicated earlier this week that substantial progress had been made in resolving key issues pertaining to the review of a USD3 billion loan program with Egypt. Georgieva expressed optimism regarding the imminent finalization of additional financing arrangements within the coming weeks, as reported by Reuters.

Despite these positive developments, Fitch cautioned that Egypt will continue to grapple with significant economic and financial hurdles, exerting pressure on its credit standing. The agency's report emphasized that Egypt's macroeconomic landscape is poised to remain challenging throughout the fiscal years 2024 and 2025. Challenges are expected to manifest in the form of elevated inflation rates and a relatively subdued growth trajectory, underscoring the need for sustained efforts to navigate through ongoing economic complexities.

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