Wednesday, Egypt announced that it has come to an agreement with the International Monetary Fund to raise its bailout funds to a total of $8 billion.

On Wednesday, Prime Minister Moustafa Madbouly informed the public in a televised statement that Egypt has been in discussions with the IMF for several months to raise the $3 billion bailout loan that was originally agreed upon in 2022.

Madbouly said the new deal will enable the government to receive loans from other financial institutions, including the World Bank.

The statement was made a few hours after the Central Bank of Egypt increased its primary interest rate and allowed the currency to float freely.

The IMF has been advocating for these measures, which aim to counter inflation and attract foreign investment due to the current deficit of foreign currency in the country.

After the announcement regarding the currency, the pound started to fluctuate and in a matter of hours, its value drastically decreased by over 60% compared to the dollar. By early afternoon, banks were exchanging the U.S. currency for more than 50 pounds per $1, a significant increase from the previous rate of about 31 pounds per dollar.

The Egypt economy has suffered greatly due to government cutbacks, the COVID-19 crisis, the effects of the conflict in Ukraine, and most recently, the clashes between Israel and Hamas in Gaza.

The conflict in Ukraine, which had a significant impact on the world economy, had a negative impact on Egypt, a country with financial constraints. As the largest Arab nation, Egypt depends heavily on wheat imports and relies on other countries to provide food for its population of over 104 million.