Dubai United Arab Emirates (CNN)– Egyptian Prime Minister, Mostafa Madbouly, announced the signing of a financing agreement between Egypt and the International Monetary Fund, hours after announcing a raise in the interest rate and allowing the price of the pound to move according to market mechanisms.
Madbouly explained, in a press conference on Wednesday, that the broader agreement includes a financing package worth $20 billion, distributed among $8 billion from the International Monetary Fund, and $12 billion from the World Bank and the European Union.
Madbouly said: “We are working to increase foreign exchange resources and ensure the flow of direct foreign investments,” in addition to “rationalizing and governing spending during the coming period.”
Madbouly stated that the government seeks to increase partnership and return the private sector to be the largest contributor to the Egyptian economy, while he pointed to a plan to set a ceiling for total public investments at about one trillion pounds (one billion and 272 million dollars).
Before announcing the agreement, the Central Bank of Egypt announced, earlier Wednesday, a series of decisions, including increasing the interest rate by the highest rate in its history by 600 basis points, bringing the overnight deposit and lending rates and the main transaction rate to 27.25%, 28.25% and 27.75%. , Respectively.
The Central Bank decided to allow the pound’s exchange rate to move according to market mechanisms. As a result of the decision, the price of the dollar against the pound moved in banks to levels exceeding 50 pounds.
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