CAIRO: The IMF has softened several conditions of its $8 billion financial support package to Egypt, including allowing Cairo more time to implement reforms, it said in a review.

WHY IT'S IMPORTANT

Egypt and the IMF agreed on a package in 2022, but the IMF postponed disbursements several times after Egypt failed to follow through on conditions, particularly a commitment to a flexible exchange rate. This new review marks a softening of some IMF benchmarks.

SOFTER BENCHMARKS

The latest review, approved in late July but released only on Monday, was Egypt's third and followed expansion of the package size in March. The IMF undertakes reviews twice a year before disbursing funds.

*The IMF agreed to delay publication of annual fiscal account audits by its Central Auditing Organisation until the end of November from the original end-March, pending an amendment to the law governing the organisation.

*It allowed a delay in drawing up a plan to recapitalise the central bank, previously scheduled for the end of April, until the end of August to give the authorities more time to estimate how much new capital is needed and to draw up a strategy.

*It also said Egypt could replace its quarterly retail fuel price increases with a firm commitment to raise prices to "cost recovery levels" by the end of 2025.

The IMF board was originally scheduled to approved the review on July 11, but postponed its meeting until July 29, four days after Egypt raised fuel prices by up to 15%.

"Restoring energy prices to their cost recovery levels, including retail fuel prices by December 2025, is essential to supporting the smooth provision of energy to the population and reducing imbalances in the sector," the review said.

($1 = 48.6800 Egyptian pounds) (Reporting by Patrick Werr; Editing by Cynthia Osterman)