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Cairo, Egypt.

The loan has been granted under the Rapid Financing Instrument, which offers financial assistance to member countries facing urgent financing issues.

The RFI will help alleviate some of Egypt’s more pressing financing needs, including spending on health, social protection, and supporting the most impacted sectors and vulnerable groups, the IMF said.

“The Covid-19 pandemic has drastically disrupted people’s lives, livelihoods, and economic conditions in Egypt. The global shock has resulted in a tourism standstill, significant capital flight and a slowdown in remittances – resulting in an urgent balance-of-payments need”, Geoffrey Okamoto, first deputy managing director and acting chair of the IMF Executive Board said.

“The government of Egypt has responded to the crisis with a comprehensive package aimed at tackling the health emergency and supporting economic activity. The authorities acted swiftly to allocate resources to the health sector, provide targeted support to the most severely impacted sectors, and expand social safety net programs to protect the most vulnerable.”

“Additional expeditious support from multilateral and bilateral creditors will be needed to close the remaining balance of payments gap, ease the adjustment burden and preserve Egypt’s hard-won macroeconomic stability”, Okamoto added.

The IMF said it would remain “closely engaged” with the Egyptian government and the Central Bank of Egypt, and “stands ready to provide policy advice and further support”.

According to the organisation, Egypt achieved a turnaround prior to the Covid-19 shock, carrying out a successful economic reform programme supported by the IMF’s Extended Fund Facility to correct large external and domestic imbalances.