September 19, 2017 / 4:02 PM / a year ago

Egypt expects IMF review by end-October: finance minister

CAIRO (Reuters) - Egypt expects the next review of its International Monetary Fund loan program by end-October, ahead of a $2 billion disbursement set for December, Finance Minister Amr El-Garhy said on Tuesday.

Egypt's Finance Minister Amr El-Garhy attends a news conference in Cairo, Egypt August 11, 2016. REUTERS/Mohamed Abd El Ghany

Garhy also said the exact timing of the country’s next Eurobond sale, expected to be a 1.5 billion euro-denominated issue by end-November, will be announced within two weeks.

Egypt is hoping a reform program — including floating its currency, hiking fuel prices, and cutting subsidies and tied to the $12 billion, three-year IMF loan — will put the economy back on track.

It has already received the first $4 billion tranche of the loan.

The North African country has meanwhile tapped international debt markets to help meet its financing needs, issuing $7 billion in Eurobonds earlier this year, returning to international markets after a period of economic turmoil following an uprising in 2011.

Egypt hopes to issue a new Eurobond program worth $8 billion next year, with between $3-4 billion of bonds coming in the first quarter of 2018.

Separately, a 1.5 billion euro-denominated issuance is expected before the end of November.

“The purpose of issuing euro-denominated bonds is to diversify the country’s currency basket and fulfil short-term obligations in that currency,” Garhy told Reuters in a telephone interview.

Garhy said he expected Egypt’s economic growth rate to reach 4.75-5.0 percent in the three months to September. Before 2011, the economy was growing about 7 percent annually.

“There are still challenges and a lot of work ahead of us to achieve progress in the economic program for growth to continue and the budget deficit to narrow,” Garhy said.

Hard currency reserves and foreign investments are steadily growing but inflation is running at above 30 percent.

Garhy said he expected that to drop below 15 percent by the end of the 2017-2018 fiscal year that began in July.

Reporting by Ehab Farouk; Writing by Nadine Awadalla and Arwa Gaballa; editing by John Stonestreet

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