The Central bank of Egypt began to fulfill the requirements of the IMF
2022.11.21 09:07
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The Central bank of Egypt began to fulfill the requirements of the IMF
Budrigannews.com – A circular that was posted on the website of Egypt’s central bank on Monday stated that the ministry of finance will take over the administration and costs of the country’s primary subsidized loan programs.
The International Monetary Fund has long demanded the transfer, requiring that the general budget clearly reflect the cost of any subsidy programs that fall outside of normal central bank activity.
The transfer comes after Hassan Abdalla, the new governor of the central bank, who was appointed in August following the sudden departure of powerful former governor Tarek Amer.
A significant number of the credit programs, which cover industry, development and farming as well as the travel industry and home loans, were extended to assist organizations with harming by the Covid pandemic.
According to the bank’s website, the central bank provided loans with an interest rate of 8% to private industrial, agricultural, and construction companies that earned more than 50 million pounds with an allocation of 100 billion Egyptian pounds ($4.07 billion).
It also gave 35 billion pounds to other industries and 50 billion pounds to mortgage subsidies for middle-class housing. It also gave 50 billion pounds, also at 8%, to support tourism businesses during the pandemic.
In a $5.2 billion Stand-by Arrangement with the IMF that was signed in June 2020, Egypt promised that its central bank would not introduce any new programs for subsidized loans or extend programs that were already in place.
The 2020 agreement stipulated that the government would pay for any uncommitted interest subsidy costs as of May 2021, and that the central bank would limit its lending to banks to short-term liquidity management.
As part of a package designed to assist in mitigating the financial consequences of Russia’s invasion of Ukraine, Egypt and the International Monetary Fund (IMF) came to a staff-level agreement last month for additional support of $3 billion under a 46-month Extended Fund Facility.
($1 = 25.2245 Egyptian pounds)
