CAIRO, Nov 13 (Aswat Masriya) – Egypt seeks to reduce inflation to below 10 percent by 2018/2019, the finance ministry said in a statement Sunday, in light of $12 billion loan agreement with the International Monetary Fund (IMF).

On Friday, the IMF’s executive board approved a three-year $12 billion loan to Egypt to support its economic reform programme.

The programme also targets a 5.5 percent GDP growth by 2018/2019, the statement said, which will contribute to combating unemployment through implementing structural reforms that will improve the investment climate.

Egypt will repay the $12 billion loan in 10 years over 12 equal installments, with a 4.5 year grace period, according to the statement.

The IMF is set to disburse an initial $2.75 billion loan tranche, with the remaining amount to be phased over the duration of the program, subject to five reviews.

A second $1.25 billion tranche is expected to be paid in April or May next year, the ministry said.

In the statement, Finance Minister Amr al-Garhy said that the IMF agreement ushers in “a new era of economic growth.”

The IMF’s board’s approval of the loan comes after the Central Bank of Egypt's decision to float the pound last week. The IMF had welcomed the decision, saying it will improve the country's external competitiveness, support exports and tourism and attract foreign investment.

Egypt embarked on successive economic reforms over the past few months with the aim of cutting the budget deficit and addressing an acute dollar shortage. The latest reforms included floating the currency and cutting fuel subsidies.