The International Monetary Fund (IMF) said it would give Egypt 2.77 billion dollars in aid to help it “meet the urgent balance of payments” requirements that the country is facing as a result of the coronavirus.
“The pandemic and global shock pose an immediate and severe economic disruption that could negatively impact Egypt’s hard-won macroeconomic stability if not addressed,” the Washington-based institution said.
The aid will help Egypt limit the decline in its foreign currency reserves and provide financing to the budget for “targeted and temporary spending.”
On April 26, Egypt’s government said it had applied for an IMF financial package to boost its ability to counter the novel coronavirus crisis.
Egypt has so far reported a total of 9,746 infections of coronavirus, including 533 deaths.
Prime Minister Mostafa Madbouly said at the time the IMF loan would be a “proactive step” against potential repercussions on Egypt’s economy due to the virus and was aimed at preserving the gains made during economic reforms in recent years.
Egypt’s foreign reserves fell to 37 billion dollar at the end of April from about 40 billion dollars at the end of March after having fallen by 5.4 billion dollars in March.
Egypt in 2016 secured a 12-billion-dollar, three-year IMF loan to help the Egyptian government implement economic reforms that saw tough austerity measures imposed in order to help the country stabilize its finances.
In 2019, Egypt received the last tranche of the IMF loan.
The IMF has stepped up its assistance and lending programmes since the COVID-19 pandemic broke out, to help nations struggling as the global economy enters a downturn amid lockdowns in countries around the world to stem the virus’ spread.
The IMF has said it is in talks with about 100 countries in need of assistance.