“The IMF staff is in discussions with the authorities and expects to present the RFI request to the board on May 11th”, IMF Mission Chief for Egypt Uma Ramakrishnan, told Bloomberg, without giving an estimate for the expected funding.
The stand-by agreement is a preemptive step that will last one year and be coupled with a sovereign bond issuance program to fend off any future gaps in Egypt’s current account, said the official who confirmed the RFI figure and asked not to be identified because the matter is confidential.
No figure was given for the stand-by deal with the Washington-based institution.
Egypt last year wrapped up a sweeping IMF-backed reform program which included a $12 billion loan and sought to rekindle investor interest after the 2011 uprising that ousted then President Hosni Mubarak.
The virus outbreak is putting pressure on some of Egypt’s main sources of foreign currency such as tourism, remittances and Suez Canal receipts. The IMF financing will cover part of a funding gap for the country that may be about $10 billion by the end of 2020, according to estimates from investment banks EFG Hermes and Goldman Sachs Group Inc.
The RFI will allow Egypt to “address any immediate balance of payments needs and support the most affected sectors and vulnerable groups of people,” the IMF said in a statement after the request last month.