Egypt Secures $12 Bln Loan From IMF

(RTTNews) - The International Monetary Fund approved $12 billion loans to help the Egyptian authorities to implement economic reforms.

The executive board granted $2.75 billion for immediate disbursement. The remaining amount will be phased over the duration of the program.

The IMF fund help the nation to correct its external imbalances and restore confidence. In order to address the longstanding challenges in the economy, Egypt developed a homegrown economic program.

The economy currently faces balance of payments problem; large budget deficits that led to rising public debt; and low growth with high unemployment.

The authorities recognize that resolute implementation of the policy package under the economic program is essential to restore investor confidence, reduce inflation to single digits, rebuild international reserves, strengthen public finances, and encourage private sector-led growth, the IMF said.

Policies supported by the IMF program aim to boost growth and create jobs while protecting vulnerable groups.

Earlier on Friday, S&P Global Ratings revised Egypt's rating outlook to 'stable' as it expected the IMF to approve the three-year loans to Egypt as the central bank decided to float the Egyptian pound, which was a key condition for granting funds.

Last week, the central bank formally moved to a floating exchange rate regime that reduced the currency value against the U.S. dollar by 48 percent. The bank raised its key overnight deposit and lending rates by 300 basis points.