CAIRO — The International Monetary Fund approved a $12 billion loan for Egypt on Friday, in a move intended to stave off economic collapse in the Arab world’s most populous nation as it grapples with a plunging currency, soaring inflation and shortages of staple foods.
The monetary fund signed off on the loan at a board meeting in Washington after Egypt raised $6 billion in external financing and agreed to significant economic changes, including allowing the currency to trade freely and reducing energy subsidies. Those measures, although painful, are intended to increase confidence in the government and attract foreign investment.
The first installment of the loan, $2.75 billion, was immediately disbursed. Tarek Amer, the governor of the central bank, confirmed that it had been received Friday. The rest will be paid out over three years.
But some economists warned that the monetary fund’s loan was only the first of several painful yet urgently needed steps to stabilize Egypt’s economy, and in the short term, conditions for ordinary Egyptians may continue to deteriorate, a worrisome prospect for the country’s leader, President Abdel Fattah el-Sisi.
Mr. Sisi has relied heavily on Saudi Arabia to bolster the economy, which started to tumble in 2011 during the uprising that overthrew President Hosni Mubarak. The Saudis and, to a lesser extent, other Persian Gulf countries have given Egypt $30 billion in aid over the past three years.
But of late the relationship with Saudi Arabia has deteriorated, and Egypt has found itself cut off by its Saudi benefactor.
Egypt’s economic crisis worsened this year as a severe scarcity of foreign currency led to inflation and shortages of essential goods like sugar, rice and medicine.
Saudi Arabia did not send expected shipments of discounted petroleum products for October and November, and Egypt was forced to spend precious currency reserves to buy those products from other sources.
Reluctantly, Egypt turned to the monetary fund.
To meet the fund’s requirements, the government agreed to painful policy changes that it had long avoided. It created a value-added tax. It raised the price of gasoline, to about 21 cents from 16 cents per liter — still extremely cheap, but expensive for low-paid Egyptians. It has progressively peeled back electricity subsidies.
The government floated the currency this month, and it lost nearly 50 percent of its value, wiping out savings and halving salaries. From a fixed exchange rate that had the Egyptian pound officially trading at 8.8 to the dollar, the pound has now been devalued to 16.7 against the dollar.
The monetary fund’s loan will inject more money into Egypt’s economy and signal confidence in the government, making Egypt more attractive to foreign investors, said Angus Blair, chief operating officer of Pharos Investments, a bank based in Cairo.
“If you look at what’s happening, they are making the right choices,” Mr. Blair said. Referring to fellow bankers, he said, “It’s not going to be easy, but they are pleased that there is new thinking, which is what Egypt needed.”
But the loan could imperil the Egyptian authorities, who have had to take steps that have created hardship across the country.
Nearly all Egyptians have been affected by the economic crisis, from wealthy students who can no longer pay the rising tuition fees at private universities to families who can no longer afford basic foods like tomatoes.
But on Friday, few Egyptians turned out for protests against the rising cost of living, which were called for before the announcement about the monetary fund’s loan.
Security forces in armored personnel carriers, including masked men carrying assault rifles, were deployed across Cairo and other parts of the country to discourage such demonstrations. Worshipers were sparse in mosques. Roads were nearly abandoned, and shops that are normally open on Friday remained closed.
Hardships are likely to worsen in the near future for Egyptians. Inflation is likely to keep rising this year as the floating currency begins to push up the price of essential goods.
The government recently rolled out social service programs that it says will increase assistance for the poor, but only five million Egyptians have benefited so far. One-quarter of the more than 90 million Egyptians live under the poverty line, and many more live hand to mouth.
The cash transfer programs offer modest assistance, with one component providing families a maximum of about $35 every three months and another providing about $21 a month.
“It’s only enough for food,” said Olfa el-Sellami, a media adviser for the Social Solidarity Ministry, which oversees the program. “They can buy chicken, some ducks, some vegetables to sell, some sewing thread.”
The monetary fund has said that it supports food subsidies and that the Egyptian government will try to increase aid and opportunities for the poor, including efforts to build public nurseries and provide vocational training for women.
Despite the new loan, some economists expressed doubts that Egypt would be able to recover. Samer Atallah, a professor of economics at the American University in Cairo, suggested that it was unrealistic to expect that Mr. Sisi’s government, which had ravaged the economy, would now save it.
Mr. Atallah, noting the estimated $30 billion that Saudi Arabia and other gulf states had given Egypt, asked, “Where has it gone?”
The Suez Canal project had “no financial feasibility,” he said. The government has not taken responsibility for other missteps, such as the accidental killing of 12 Mexican tourists. It has not fully explained the downing of a Russian flight over the Sinai, which killed 224 people on board. The government has also been handing over projects to the military, from building roads to controlling food ration cards. And the prosecution of Egypt’s top auditor, Hisham Genena, after he exposed severe corruption, is also a chilling sign, Mr. Atallah said.
“The policy instability, the corruption, the bureaucracy,” Mr. Attallah said. “When domestic investors are thinking twice, why would international investors come?”