CAIRO — Egypt secured a $1.2 billion tranche from the International Monetary Fund on April 3, 2025, following the IMF Executive Board’s approval of the country’s fourth economic reform review. The disbursement came after Egypt’s central bank raised its key interest rate to 27% to support the Extended Fund Facility program, officials said.
The Egyptian cabinet confirmed the receipt of the tranche on April 3, 2025, describing it as part of the Extended Fund Facility (EFF) arrangement designed to support Egypt’s ongoing economic reforms. Finance Minister Mohamed Kouchouk stated that the IMF’s approval of the disbursement marked a significant step in the program’s implementation.
The $1.2 billion tranche, equivalent to 922.87 million Special Drawing Rights (SDR), was released following the IMF Executive Board’s completion of the fourth review of Egypt’s economic reform program on March 10, 2025, officials said.
This latest disbursement is part of an expanded $8 billion, 46-month EFF arrangement initiated in March 2024, which increased the original $3 billion program approved in late 2022, according to records and government announcements. Egypt has previously received early tranches totaling approximately $1.98 billion under this arrangement. The IMF also approved Egypt’s request for a Resilience and Sustainability Facility (RSF) arrangement, granting access to an additional $1.3 billion, sources confirmed.
The central bank’s decision to raise its key interest rate to 27% was a critical measure taken to meet IMF conditions and support the reform program, officials said. This rate hike, implemented alongside a steep currency devaluation, aimed to address Egypt’s chronic foreign currency shortages, high inflation, and elevated debt levels. The central bank’s aggressive monetary tightening was part of broader austerity measures designed to stabilize the economy and bolster foreign reserves, according to statements from the Egyptian government and IMF sources.
The reforms under the EFF program include these monetary policy adjustments as well as structural changes intended to improve fiscal sustainability and economic resilience. The IMF’s staff-level agreement on the fourth review was reached on December 24, 2024, subject to final Executive Board approval, according to an IMF press release. Angham Al Shami, the IMF press officer, provided contact details for media inquiries related to the agreement.
Egypt’s cabinet highlighted that the tranche disbursement would enhance liquidity and strengthen the country’s foreign reserves amid ongoing economic challenges. The injection of funds is expected to support Egypt’s efforts to manage inflationary pressures and currency volatility, officials said. The government emphasized that the reforms are part of a comprehensive strategy to restore economic stability following the significant currency devaluation.
The IMF’s Extended Fund Facility arrangement with Egypt spans 46 months and includes multiple reviews and disbursements tied to the country’s progress in implementing agreed reforms. The fourth review and associated tranche approval followed detailed assessments of Egypt’s fiscal and monetary policies, debt management, and structural reform initiatives. The Resilience and Sustainability Facility, approved alongside the EFF, aims to support Egypt’s long-term sustainability goals by providing additional financial resources for targeted initiatives.
The Egyptian government’s announcement of the April 3 disbursement came shortly after the central bank’s rate increase, signaling coordinated policy actions to meet IMF conditions and secure continued financial support. These developments reflect ongoing efforts to address persistent economic vulnerabilities, including foreign currency shortages and inflation, which have challenged the North African nation in recent years.
Looking ahead, Egypt is expected to continue implementing the reform measures outlined in the EFF and RSF frameworks, with further reviews and potential disbursements contingent on sustained progress. The IMF’s involvement remains a key component of Egypt’s strategy to stabilize its economy and improve fiscal sustainability over the duration of the program.
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