IMF approves $12 billion loan to salvage Egypt's economy


CAIRO (AP) — The International Monetary Fund said today its executive board has approved a three-year bailout totaling $12 billion to Egypt, to support the country's ailing economy – a move intended to restore investor confidence and raise the country's foreign reserves.

The approval comes almost a week after the Egyptian government floated its currency and raised fuel prices in order to qualify for the loan. These reforms earned praise from the IMF and the international business community, but caused price hikes for an already frustrated cash-strapped population, with President Abdel-Fattah el-Sissi now risking a serious political backlash.

The IMF said the loan aims to help Egypt "restore macroeconomic stability and promote inclusive growth." It added that Egypt will receive a first installment of $2.75 billion immediately.

Days earlier, Christine Lagarde, the IMF chief, described Egypt's reform program as "ambitious" and said it will put the country on a "sustainable path and achieve job-rich growth."

Tarek Amer, the head of Egypt's Central Bank, was quoted by the state-run MENA news agency as saying that the first installment has arrived at the bank and increased foreign reserves to $23.5 billion. Egypt had $36 billion in reserves before the 2011 uprising.

Years of unrest after the ouster of longtime autocratic President Hosni Mubarak in 2011 left Egypt's economy in shambles.

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