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IMF approves $2b loan instalment for Egypt

| Updated: July 04, 2018 14:22:07

IMF approves $2b payment to Egypt

The International Monetary Fund (IMF) has approved a 2 billion US dollar loan instalment for Egypt under a 12 billion dollar aid deal to support the country's economic reform.

The latest loan, the fourth instalment of the package, brings the total released loan to over 8.0 billion dollars.

In November 2016, Egypt agreed to the three-year, 12 billion US dollar IMF loan programme, reports Xinhua.

According to the loan agreement, they tied to ambitious economic reforms such as subsidy cuts, tax hikes, enacting a value-added tax, as well as the devaluation of its local currency.

In the latest move to phase out subsidies, Egypt increased fuel prices on June 16 by up to 66.6 per cent to meet the IMF loan deal.

Earlier that week, it raised electricity prices by an average of 26 per cent in the 2018-19 Fiscal Year.

Egypt's President Abdel-Fattah al-Sisi, who encouraged the reforms, said that the government spends some 18.6 billion dollars a year on subsidies to cover fuel, food and electricity.

The country's economic growth rate is expected to reach 5.2 per cent in the FY2017-18 due to an anticipated increase of gas production, the IMF said in an annual report released in early May.

Egypt's fiscal year starts in early July and ends in late June.

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