IMF approves $12 billion loan to salvage Egypt's economy

The International Monetary Fund said on Friday that its executive board has approved a three-year bailout totaling $12 billion to Egypt, to support the country's ailing economy — a move intended to restore investor confidence and raise the country's foreign reserves. Even with the loan, economic challenges remain ahead.

The approval comes almost a week after the Egyptian government floated its currency and raised fuel prices in order to qualify for the loan. These painful measures earned praise from the IMF and the international business community, but caused price hikes for an already frustrated cash-strapped population, with President Abdel-Fattah el-Sissi now risking a serious political backlash.

The IMF made the announcement on Friday and said the loan aims to help Egypt "restore macroeconomic stability and promote inclusive growth." It added that Egypt will receive a first installment of $2.75 billion immediately.

Days earlier, Christine Lagarde, the IMF chief, described Egypt's reform program as "ambitious" and said it will put the country on a "sustainable path and achieve job-rich growth."