International Monetary Fund (IMF) chief Christine Lagarde said Tuesday (November 8th) she will recommend the institution approve a $12 billion loan for Egypt when the board meets Friday, AFP reported.
The loan will support Egypt's "ambitious" reform programme, Lagarde said, and is needed to help restore stability and growth to the economy.
She praised economic reforms that include floating the Egyptian pound last week. The IMF had made floating the pound -- which resulted in a steep devaluation and sharp price rises -- a condition of the loan.
Egyptians are looking at a period of hardship as the government unrolls austerity measures ahead of the IMF programme. The country has endured months of shortages of products ranging from sugar to baby formula.
Cairo governments had avoided the measures, fearing unrest, but President Abdel Fattah al-Sisi says Egypt no longer has the luxury of postponing them.
Lagarde said in a statement that the moves, which also include cutting fuel subsidies, "will notably improve Egypt's external competitiveness, address shortages of foreign currency, support exports and tourism and help attract foreign investment".
The programme aims "to put the country's economy on a sustainable path and achieve job-rich growth", she said.
