CAIRO: Egypt has signed a $1.5 billion financing agreement with the International Islamic Trade Finance Corp. to fund its trading, including imports of energy products and essential commodities, CNBC Arabia wrote on Twitter, citing the head of the corporation.
Last year Egypt signed a similar agreement also worth $1.5 billion with the ITFC, which is headquartered in Jeddah in Saudi Arabia and often funds Egypt's commodities imports, including grains and petroleum.
Egypt's Planning Minister Hala al-Saeed said at a signing ceremony in Cairo that the financing cooperation portfolio between Egypt and the corporation totals $14.5 billion so far, according to a statement by the Planning Ministry posted on its account on Facebook.
She added that the latest signing comes within the framework agreement concluded between Egypt and the ITFC in 2018 that was renewed last year for an additional five years, with an amendment to the credit limit of the agreement from $3 to $6 billion.
Egypt recently agreed to a $3 billion International Monetary Fund support package as it faces a currency crunch exacerbated by Russia's war in Ukraine, pushing up its bills for wheat and oil while dealing a blow to its tourist numbers from both nations. Tourism is a key source of hard currency for Egypt.
IMF earlier this month said Egypt is facing overall an estimated financing gap of $17 billion that will need to be closed with official financing, including from the Fund. It said that Egypt will need to mobilize funds from its global partners to close this financing gap in the coming years.
The World Bank and other multilateral institutions have continued to be strong supporters of Egypt’s reform program. In addition, the Gulf Cooperation Council countries have assured to roll over deposits at the Central Bank of Egypt through the end of the IMF-promoted program.
IMF said its proposed Extended Fund Facility arrangement with its underlying economic program is intended to help Egypt alleviate immediate economic challenges, strengthen policy frameworks and deepen structural reforms. As a result, growth is expected to recover gradually and inflation, anchored by data-dependent monetary policy, is expected to converge to around 7 percent, IMF said in a report.
A return to a sustained primary surplus of above 2 percent of gross domestic product over the medium term would reduce general government debt to around 78 percent of GDP by 2027, it added.