In a meeting with Egyptian authorities in Washington, U.S. Treasury Secretary Janet Yellen has reaffirmed the United States’ commitment to supporting Egypt’s economic reforms. The discussions, which took place on Tuesday, coincided with talks about expanding Egypt’s existing $3 billion loan program with the International Monetary Fund (IMF).
The Egyptian delegation, comprising the finance minister and central bank governor, is also scheduled to meet with IMF Managing Director Kristalina Georgieva during their visit to Washington. The high-level engagements come at a crucial time as U.S. Secretary of State Antony Blinken conducts diplomatic efforts in the Middle East to prevent the Israel-Gaza conflict from escalating into a broader regional crisis.
IMF Managing Director Kristalina Georgieva had previously mentioned in November that the IMF was actively considering augmenting Egypt’s $3 billion loan program. The economic challenges faced by Egypt, exacerbated by the impact of the Israel-Gaza conflict, have prompted discussions about additional financial support.
Egypt, grappling with substantial foreign debt levels, has been significantly affected by the conflict in the neighboring Gaza Strip. The repercussions include potential disruptions to tourism bookings and natural gas imports, along with recent attacks on Red Sea ships.
The U.S. Treasury, in a statement, highlighted that Secretary Yellen addressed the economic challenges stemming from the Gaza conflict during her meeting with Egyptian Finance Minister Mohamed Maait, Minister of International Cooperation Rania Al-Mashat, and Central Bank of Egypt Governor Hassan Abdalla. Yellen reiterated the strong support of the United States for Egypt and its ongoing economic reform initiatives, emphasizing the shared goal of strengthening Egypt’s economy and promoting inclusive, sustainable growth.
Egypt’s existing $3 billion loan program, established with the IMF in December 2022, encountered hurdles when the country did not permit its currency to float freely and made limited progress on the sale of state assets. Consequently, the IMF, with the U.S. as its largest shareholder, delayed disbursements of approximately $700 million anticipated in 2023. In December, the IMF announced ongoing discussions about expanding the $3 billion program, considering the economic risks arising from the Israel-Gaza conflict.
As these crucial discussions unfold, the U.S. reaffirms its commitment to supporting Egypt’s economic resilience and reform efforts, signaling a collaborative approach to address the challenges posed by regional conflicts and economic uncertainties.