CAIRO, March 6 (Xinhua) -- Egypt signed a financing agreement on Wednesday with the International Monetary Fund (IMF) to increase an initial 3 billion U.S. dollars loan deal to 8 billion dollars, Egyptian Prime Minister Mostafa Madbouly announced at a press conference.
As part of the agreement, Egypt will also receive a loan of about 1.2 billion U.S. dollars from a separate facility that promotes environmental sustainability, Madbouly said.
Besides the IMF, the prime minister added that other "international partners," including the World Bank, will also provide Egypt with soft loans to support the state in achieving monetary stability through an integrated program.
"Our goal during the first period of Egypt's reform program following the IMF agreement is to rationalize spending and to promote private sector investment in Egypt," said Madbouly.
Earlier in the day, the Central Bank of Egypt (CBE) raised its interest rates by 600 basis points (bps) and said it would allow the exchange rate to be determined by the market to ensure a smooth transition to a flexible inflation targeting regime.
The CBE raised the overnight lending rate to 28.25 percent, its overnight deposit rate to 27.25 percent, and the rate of the main operation to 27.75 percent.
The CBE also decided to accelerate the monetary tightening process in order to fast-track the disinflation path and ensure a decline in underlying inflation.
Egypt's annual inflation figures, despite recent declines, are expected to remain substantially above the CBE's inflation target of 7 percent (±2 percentage points) on average in the fourth quarter of 2024, according to the CBE. ■