Among the reforms agreed are subsidy cuts, introducing Value Added Tax (VAT) and reducing bureaucracy for foreign investors. The IMF also wants Egypt to focus monetary policy on easing the chronic dollar shortage and reduce inflation to single digits.
"The program aims to improve the functioning of the foreign exchange markets, bring down the budget deficit and government debt, and to raise growth and create jobs," Jarvis said in a statement.
Egypt's dollar-denominated 2025 bond rose to trade at its highest level since end-September 2015 after the deal . Egypt's stock market edged up 1.1 percent by mid-afternoon.
Fund managers said the loan could ease pressure on Egypt's finances and bolster foreign investment but were not rushing to buy stocks until they were more confident the deal would go through and reforms would be implemented.
In late 2012, Egypt reached an initial deal with the IMF for a $4.8 billion loan, but it was never finalized.
"We don't expect IMF lending to lead to an immediate turnaround," London-based Capital Economics said in a note.
"In the near term, high inflation and tighter monetary and fiscal policy will prevent domestic demand from strengthening significantly. But we are more optimistic about what the deal means for medium-term growth prospects."