IMF Team in Egypt to Review Second Installment of $12B Loan

CAIRO (Reuters) -

An International Monetary Fund (IMF) delegation will arrive in Cairo on Sunday to review Egypt’s progress on economic reforms before it disburses the second installment of a $12-billion loan program, the Finance Ministry said.

The delegation will stay until May 11 and meet with officials from the ministry and the central bank, the ministry said in a statement.

Egypt agreed the three-year program with the IMF in November, after floating its Egyptian pound currency in a dramatic move aimed at unlocking foreign inflows and boosting exports after a long-running dollar shortage threatened to paralyze the economy.

It promised a raft of tough reforms, including narrowing its budget deficit, in return for the $12-billion loan package from the IMF and a host of other bilateral backers with payments spread over three years and linked to progress on reforms.

The IMF released a first installment of $2.75 billion in November, shortly after the deal was agreed.

Egypt has said it expects to receive the second installment, worth $1.25 billion, in May or June, once the IMF review has been completed.

IMF Managing Director Christine Lagarde told Reuters in February Egypt was making good progress on reforms.

As part of reform efforts, Egypt has introduced a Value Added Tax (VAT) and secured $4 billion in eurobonds from international markets in an oversubscribed issuance.

It is also part way through a program to reform power and fuel subsidies and is preparing to privatize several state owned banks and energy companies.