Arab News, Tuesday, Jan 24, 2023 | Rajab 2, 1444
Egypt signs $1.5bn financing agreement with ITFC
Emirates: Egypt has signed a $1.5
billion financing agreement with the International Islamic Trade Finance
Corp. to fund its trading, including imports of energy products and essential
commodities, CNBC Arabia wrote on Twitter, citing the head of the corporation.
Last year Egypt signed a similar agreement also
worth $1.5 billion with the ITFC, which is headquartered in Jeddah in Saudi
Arabia and often funds Egypt's commodities imports, including grains and
Egypt's Planning Minister Hala al-Saeed said at a
signing ceremony in Cairo that the financing cooperation portfolio between Egypt
and the corporation totals $14.5 billion so far, according to a statement by the
Planning Ministry posted on its account on Facebook.
She added that the latest signing comes within the
framework agreement concluded between Egypt and the ITFC in 2018 that was
renewed last year for an additional five years, with an amendment to the credit
limit of the agreement from $3 to $6 billion.
Egypt recently agreed to a $3 billion
International Monetary Fund support package as it faces a currency crunch
exacerbated by Russia's war in Ukraine, pushing up its bills for wheat and oil
while dealing a blow to its tourist numbers from both nations. Tourism is a key
source of hard currency for Egypt.
IMF earlier this month said Egypt is
facing overall an estimated financing gap of $17 billion that will need to be
closed with official financing, including from the Fund. It said that Egypt will
need to mobilize funds from its global partners to close this financing gap in
the coming years.
The World Bank and other multilateral institutions
have continued to be strong supporters of Egypt’s reform program. In addition,
the Gulf Cooperation Council countries have assured to roll over deposits at the
Central Bank of Egypt through the end of the IMF-promoted program.
IMF said its proposed Extended Fund
Facility arrangement with its underlying economic program is intended to help
Egypt alleviate immediate economic challenges, strengthen policy frameworks and
deepen structural reforms. As a result, growth is expected to recover gradually
and inflation, anchored by data-dependent monetary policy, is expected to
converge to around 7 percent, IMF said in a report.
A return to a sustained primary surplus of above 2
percent of gross domestic product over the medium term would reduce general
government debt to around 78 percent of GDP by 2027, it added.