Arab Republic of Egypt: First and Second Reviews Under the Extended Arrangement Under the Extended Fund Facility, Monetary Policy Consultation, and Requests for Waiver of Nonobservance of a Performance Criterion, and Augmentation and Rephasing of Access-Press Release; and Staff Report

This paper presents Arab Republic of Egypt’s First and Second Reviews under the Extended Arrangement under the Extended Fund Facility (EFF), Monetary Policy Consultation, and Requests for Waiver of Nonobservance of a Performance Criterion, and Augmentation and Rephasing of Access. A strong economic stabilization plan is being implemented to correct policy slippages. The plan is centered on a liberalized foreign exchange system in the context of a flexible exchange rate regime, a significant tightening of the policy mix, reducing public investment, and leveling the playing field to allow the private sector to become the engine of growth. While the recent sizable investment deal in Ras El-Hekma alleviates the near-term financing pressures, implementation of the economic policies under the program remains critical to address Egypt’s macroeconomic challenges. Robust delivery on structural reforms will be critical to lock in the benefits of the improved financing environment. IMF staff supports the authorities’ request for the completion of the first and second reviews under the EFF Arrangement.