The Clap:
The International Monetary Fund (IMF) Communications Director Julie Kozack said the lender will delay the third review of Egypt’s USD 8 bn loan program to 29 July from the initial date scheduled for 10 July in order to finalize some policy details, Reuters reported. The third tranche would unlock another USD 820 million to Egypt’s purse.
The reasoning:
Delaying disbursal comes mainly on the back of regional conflicts amid the Israel-Gaza war and increased attacks by Houthi militants on Red Sea shipping, which has led to a more than 50% YoY decrease in Suez Canal revenues.
Some context:
Expanded from an original USD 3 billion loan agreed on in December 2022 — a package of up to USD 8 billion was approved after the CBE’s 600 bps interest rate hike and another devaluation of the EGP four months ago. Egypt unlocked the second USD 820 million tranche in June.
More to come:
The third review will also allow Egypt to apply for an extra USD 1.2 billion in low-cost, long-term climate funding under the IMF’s Resilience and Sustainability Facility.
