Egypt may be one step closer meeting the conditions for a $12 billion loan from IMF, as Bloomberg alleges Egypt has secured a $2.7 billion currency swap deal with China.
According to Bloomberg, Egypt has agreed to a currency swap with China for $2.7 billion, bringing Egypt closer to meeting the conditions set by the IMF for a much-needed $12 billion loan that will relieve Egypt of its current dollar shortage.
Speaking with an anonymous Egyptian central bank official on Sunday, Bloomberg reports the $2.7 billion currency swap agreement between China – however, Bloomberg fails to explain when the deal was reached or when the funds could be expected. The alleged deal is supposed to assist Egypt in securing its IMF loan, for which it must boost its foreign reserves by as much as $6 billion in bilateral support. So far Egypt has allegedly secured $3 billion from Saudi Arabia and the UAE, as well as less than a billion from G7 countries.
Earlier last week, Bloomberg managed to interview IMF’s Managing Director, Christine Lagarde, who expressed that she hoped the IMF board would approve Egypt’s loan request in a few weeks. The dollar shortage situation in Egypt continues to worsen by the day, as the black market currency rates continues to sell dollars at double the official bank exchange rate, wreaking havoc on the economy and resulting in importing woes creating shortages. Various financial experts believe that Egyptian officials will either devalue or float the pound in order to close the gap set by the black market, but some believe this decision will not be made until Egypt has secured the IMF loan.