CAIRO: The International Monetary Fund (IMF) executive board has approved a 46-month $3 billion financial support package for Egypt, saying it will catalyse additional funding of about $14 billion, the fund said in a statement.

The package, Extended Fund Facility (EFF), includes a flexible exchange rate regime and enhanced social safety nets to protect the vulnerable, the statement said.

Egypt’s finances, already suffering from high debt and a lack of foreign currency, deteriorated sharply after the Russian invasion of Ukraine, which prompted foreign investors to pull about $20 billion out of the country within weeks.

Bankers in north Africa’s largest economy say the gap between the Egyptian pound’s black market rate of 32 to 33 per dollar has widened in recent weeks from the official rate of 24.7 despite a 36% overall devaluation this year.

Agreement on the package was announced at the staff level on Oct. 27.

Egypt private sector shrinks in November after devaluation

The agreement provides for an immediate disbursement of about $347 million to help support Egypt’s balance of payments and its general budget, it added.

It is expected to catalyse additional financing of about $14 billion, including investments, from Egypt’s international and regional partners, the statement said.

The agreement includes a programme of structural reforms that will “reduce the state footprint and level the playing field between the public and private sector.”

It also provides for upfront monetary policy tightening and fiscal consolidation.