Egypt agrees on $3 billion loan deal with IMF as pound hits new low

Egypt has clinched a $3 billion loan agreement with the International Monetary Fund against the backdrop of a 15 percent depreciation of the local currency against the dollar, the government says.

The IMF had demanded the devaluation as a condition of the loan and the North African nation is among the top five countries in the world most at risk of defaulting on its foreign debt, according to the international credit rating agency Moody’s.

The IMF deal is also conditioned on reforms that include further cuts to subsidies, bringing yet more pain for struggling households.

In August, global investment firm Goldman Sachs estimated that Egypt would need about $15 billion in funding to be able to repay its foreign debt, currently estimated at about $150 billion.