October 3, 2019 / 4:35 PM / 2 months ago

Egypt discussing possible new IMF cooperation: central bank governor

CAIRO (Reuters) - Egypt is discussing possible further assistance from the International Monetary Fund (IMF) to help it carry out structural reforms once its current three-year IMF program ends next month, its central bank governor said on Thursday.

FILE PHOTO: The International Monetary Fund (IMF) headquarters building is seen ahead of the IMF/World Bank spring meetings in Washington, U.S., April 8, 2019. REUTERS/Yuri Gripas/File Photo

“The government and the IMF are reviewing to see if there is any area for cooperation. There are still discussions on the subject, consultations,” Tarek Amer told reporters.

“We did fiscal reform and monitoring reform. Now we are doing structural reform. We are looking to see if the IMF can help on the subject of structural reform.”

Egypt signed a three-year, $12 billion Extended Fund Facility on Nov. 11, 2016, after allowing its currency to weaken sharply, implementing a valued-added tax and raising fuel prices to reduce its balance of payments budget and deficits.

Amer said Egypt would continue working with the fund whatever new arrangement was agreed upon.

“At a minimum is the post-programme monitoring in which the IMF continues with us as long as the loan is outstanding,” he said.

Egypt’s government has said it will continue to work on attracting more investment and lowering unemployment by improving the business environment.

IMF Mission Chief for Egypt Subir Lall said the government needed to press ahead with reforms to support private sector development and job creation.

“It needs to strengthen governance and competition, better integrate women and youth in the labor market, improve access to land, and limit the role of the state in the economy,” Lall said in remarks sent to Reuters by email.

“We stand ready to support Egypt and its people as they continue the process of transforming the economy to achieve high, sustained and inclusive growth and job creation.”

A Cairo-based economist said it could be in Egypt’s interest to continue cooperating with the IMF, perhaps through a classical stand-by arrangement or a simple precautionary financing to help prevent and insure against crises.

“A new IMF program would reassure investors and reduce the cost of borrowing,” the economist said.

Reporting by Patrick Werr and Ulf Laessing; Editing by Alex Richardson

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