Egypt to get additional $3 billion in financing from ITFC, supply minister says

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Tuesday - 24 May 2022

CAIRO, May 24 (Reuters) - Saudi Arabia-based International Islamic Trade Finance Corporation (ITFC) has doubled its credit limit to top wheat importer Egypt to $6 billion from $3 billion, Egypt's supply minister said in a TV interview.

The ITFC, a member of the Islamic Development Bank Group, increased its financing in an effort to help the North African country buy expensive wheat from abroad, Ali Moselhy.

"We have this so there's no pressure on the central bank to provide dollars," Moselhy told TV channel MBC late on Monday, adding that this funding would be used for both wheat and petroleum.

The ITFC could not immediately be reached for comment.

Egypt had signed a $3 billion agreement with ITFC in January 2018 to ensure dollars were available for the country's state grains buyer to use for payment at its international purchasing tenders.

The war in Ukraine has also left Egypt facing higher costs for its substantial wheat import needs as well as a loss in tourism revenue from Russian and Ukrainian visitors to Red Sea resorts. Russia and Ukraine are the main suppliers of wheat to Egypt, which is among the world's largest importers.

In March, Egypt devalued its currency after the invasion prompted foreign investors to pull billions of dollars out of Egyptian treasury markets, putting pressure on the currency.

The Central Bank of Egypt also raised its interest rates last week for a second time since the invasion, citing an increase in annual urban inflation to 13.1% in April, its highest since May 2019.