Egypt reports that an agreement has been struck with the IMF to raise the bailout financing to $8 billion.

Egypt announced on Wednesday that it and the International Monetary Fund had achieved an agreement to raise the rescue financing to $8 billion.

The announcement was made on Wednesday in televised remarks by Prime Minister Moustafa Madbouly. Egypt and the IMF have been negotiating for months to extend a $3 billion bailout credit that was agreed upon in 2022.

According to Madbouly, the new agreement will make it possible for the government to obtain loans from other lenders, such as the World Bank.

Hours after floating the currency and hiking its benchmark interest rate, Egypt’s Central Bank made the announcement.

The IMF has made these measures one of its main requests. They are intended to counteract waves of inflation and draw in foreign investment at a time when the nation is severely short on foreign exchange.

After the announcement of the new currency, the pound started to fluctuate and within a few hours it had lost about 60% of its value in relation to the dollar. Commercial banks began trading US dollars at over 50 pounds per $1 by early afternoon, having previously traded them at roughly 31 pounds per dollar.

The benchmark interest rate was raised to 27.75% by the central bank by 600 basis points. The bank added in a statement that it had also increased the lending and overnight deposit rates by 600 basis points to 27.25% and 28.25%, respectively.

Years of government austerity, the coronavirus pandemic, the aftermath of the war in Ukraine, and most recently, the Israel-Hamas conflict in Gaza, have all had a significant negative impact on the Egyptian economy.

Egypt, the most populous Arab nation and the world’s largest importer of wheat, is financially vulnerable due to the war in Ukraine, which rocked the global economy and forced the country to purchase the majority of its food from other nations in order to feed its population of over 104 million.