Egyptian loans raise fears of impact on economy
The Egyptian government expands borrowing from the IMF and selling international bonds, amid warnings of the danger of trying to solve the economic crises by borrowing from abroad, and demands to search for alternatives as Egyptian foreign debt reaches record numbers.
CAIRO — Over the past few weeks, Egypt's foreign debt reached record numbers, after obtaining loans worth about $7.9 billion from the International Monetary Fund (IMF) under two different agreements, in addition to selling $5 billion worth of Egyptian bonds abroad.
According to the latest World Bank report on Egyptian foreign debt released in May, Egypt accumulated debts amounting to about $112 billion in 2019, an increase of 16% compared to 2018. This figure does not, however, include new debts incurred by Egypt during 2020 as the annual report only covered 2019.
On May 11, Egypt received a $2.7 billion loan from the IMF, after Cairo’s request for emergency financial assistance, known as Rapid Financing. This loan represents 100% of its quota according to the IMF’s Rapid Financing Instrument (RFI) provided to countries that apply for emergency loans.
The IMF’s Institute of International Finance said in a statement, “The RFI will help alleviate pressing financing needs, including for health, social protection, and supporting the most impacted sectors and vulnerable groups.”
