Egypt has reached a staff-level agreement with the International Monetary Fund over a standby loan of $5.2 billion. This comes after less than a month of the approval by the Fund’s executive board of a $2.8 billion emergency financial assistance to meet the country’s urgent balance of payments needs stemming from the outbreak of the coronavirus pandemic.
As critical as I was of the first IMF deal in 2016, this time the Egyptian government was right to approach the Fund. The latest funding is not likely to come at a high social cost since the government has already implemented many of the austerity measures that are usually required. The IMF’s goal is to support the previous agreement, rather than impose a new set of tough conditions.