CAIRO, March 30 (Xinhua) -- Egyptian Minister of Finance Mohamed Maait said on Saturday that the International Monetary Fund (IMF)'s approval to expand an original loan agreement from 3 to 8 billion U.S. dollars reflects the importance of Egypt's "corrective measures" and "integrated and consistent financial and monetary policies."

In a statement, the minister said that the IMF's approval of the Extended Fund Facility (EFF) arrangement with Egypt gives Cairo the right to apply for a loan of 1.2 billion U.S. dollars from a separate IMF facility that promotes environmental sustainability.

He pointed out that Egypt's economic reform program supported by the IMF aims to restore economic stability, noting that it enjoys additional financing from other financial institutions and international development partners.

On Friday, The Executive Board of the IMF completed the first and second reviews of Egypt's EFF arrangement and approved an augmentation of the original program by about 5 billion U.S. dollars. This enables the Egyptian authorities to immediately draw about 820 million U.S. dollars.

Egypt's 46-month EFF arrangement was approved on Dec. 16, 2022.

Meanwhile, Abu-Bakr al-Deeb, an Egyptian economic expert, said that expanding the IMF loan agreement with Egypt reflects the success of economic reforms and amended financial policies, which contributed to strengthening confidence in the Egyptian economy.

Al-Deeb, also an adviser to the Cairo-based Arab Center for Research and Studies, added that the new agreement with the IMF provides Egypt with hard currency, which contributes to controlling the exchange rate of foreign currencies against the Egyptian pound on the official and the black market.

"This confidence will encourage many investors to invest in Egypt, as happened recently when Egypt signed contracts worth billions of U.S. dollars with major companies," the expert noted.

Egypt has been struggling to curb rising urban inflation, which reached 35.7 percent in February compared to 29.8 percent in January, according to a report released by Egypt's Central Agency for Public Mobilization and Statistics earlier this month.

On March 6, the Central Bank of Egypt raised its interest rates by 600 basis points and said it would allow the exchange for the Egyptian pound rate to be determined by the market.

Over the past two years, the shortage of greenbacks in Egypt has led to the devaluation of the local currency and the emergence of the parallel market in the country, plunging Egypt into one of its worst economic crises.

The crisis was deepened after the Israel-Hamas conflict broke out late last year, impacting the country's tourism and halving its revenues from the Suez Canal. Enditem

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