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1st LD: IMF approves 3-year 12 bln dollars loan for Egypt

Xinhua, November 12, 2016 Adjust font size:

The International Monetary Fund (IMF) executive board approved on Friday Egypt's request for a three-year 12 billion U.S. dollars loan, Egypt's state TV reported.

Meanwhile, Governor of the Central Bank of Egypt (CBE) Tarek Amer told official MENA news agency that Egypt has received Friday an initial 2.75 billion dollars from the IMF.

Egypt reached an initial deal with the IMF on a 12 billion dollars loan in August, a move seen by many experts as a necessary step to help the country's ailing economy.

"This will make our foreign currency reserves jump to 23.5 billion dollars," Amer affirmed.

The foreign currency reserves at the CBE declined since the 2011 uprising that toppled former president Hosni Mubarak from 36 billion dollars to 19.6 billion dollars as of the end of September 2016.

Earlier this month, the CBE announced the devaluation of the Egyptian pound by 48 percent which would allow the pound to float in the financial market based on supply and demand.

The move was meant to limit the hike and shortage of dollar, boost foreign investments and meet a key demand of the IMF to provide Egypt with the loan.

Meanwhile, the Washington-based IMF board said in a statement that further disbursements following the immediately released 2.75 billion dollars will depend on the country's economic performance and implementation of reforms.

"The reform program will help Egypt restore macroeconomic stability and promote inclusive growth," said the statement.

Policies supported by the program aim to correct external imbalances and restore competitiveness, place the budget deficit and public debt on a declining path, boost growth and create jobs while protecting vulnerable groups, said the statement.

Egypt has been struggling to survive severe economic recession that led to a decline in foreign currency reserves, a growing budget deficit and rising foreign debts. Endit