IMF eases conditions in USD8B support package for Egypt amid reform delays

(MENAFN) The International Monetary Fund (IMF) has relaxed several conditions of its USD8 billion financial support package for Egypt, granting the country more time to implement required reforms. This adjustment follows a series of delays in the disbursement of funds agreed upon in 2022. The IMF’s latest review, finalized in late July but only made public recently, marks Egypt's third review of the package, which saw its size increased in March. Typically, the IMF conducts biannual reviews before releasing funds, and this latest review reflects a softened approach to Egypt's reform timeline.

Significant changes include a postponement of the annual audit of financial accounts by the Central Auditing Organization from the end of March to the end of November, contingent upon legal amendments to the organization’s governing law. Additionally, the preparation of the central bank's recapitalization plan, initially due by the end of April, has been extended to the end of August. This extension aims to provide more time for authorities to determine the necessary new capital and develop a comprehensive strategy.

The IMF has also indicated that Egypt may forgo quarterly fuel price hikes, provided the country commits to raising prices to "cost recovery levels" by the end of 2025. This adjustment came after Egypt's decision to increase fuel prices by up to 15 percent, which led to a delay in the IMF board's review meeting originally scheduled for July 11, but rescheduled to July 29. The IMF review stresses that achieving cost recovery levels for energy prices, including retail fuel, is crucial for maintaining energy supply stability and addressing sector imbalances by December 2025. 

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