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Egypt's IMF loan delayed

June 22, 2017 at 2:58 pm

National Bank of Egypt in Cario [Daniel Mayer/Wikipedia]

The Egyptian government has asked the International Monetary Fund (IMF) why the second tranche of a $12 billion, three-year loan has been delayed.

A senior official at the Egyptian finance ministry told Al-Araby Al-Jadeed that the money – which was scheduled to be paid out in March – is yet to be received, adding that it will fund bonuses for government employees.

In August 2016 the IMF approved the $12 billion loan for reviving the struggling economy, bringing down public debt, controlling inflation and protecting the poor. An initial $2.75 billion was released to Egypt’s central bank in November, while the remainder was agreed to be delivered in six installments over three years, subject to five reviews on the required reforms.

Read: How many bags of money would it take to sell Egypt?

In order to meet the IMF’s conditions the Egyptian government has implemented measures which have hit the country’s poorest, including cutting fuel and electricity subsidies, introducing a value-added tax and liberating the Egyptian currency’s exchange rate.

The finance ministry official told Al-Araby Al-Jadeed that the delay in the IMF loan’s second tranche pushed the Egyptian government to issue new bonds in the international market worth $3 billion. The Egyptian government also sold bonds worth $4 billion in three tranches.