The International Monetary Fund said on Wednesday it had made progress in discussions with Egypt of the policy and financing package that would back a resumption of disbursements of its $3 billion loan with the country.

The IMF and Egyptian authorities were discussing the impact on Egypt of the war in the Gaza Strip, and any additional funding would also depend on economic reforms prioritised under the programme, IMF Middle East and Central Asia director Jihad Azour said at a media briefing.

Reviews and disbursements under the programme have been delayed after Egypt reverted to keeping its currency informally pegged to the dollar, despite a commitment to shift to a flexible system.

Economists and diplomats have also linked the delays to a lack of swifter progress in Egypt's plans to sell state assets and reduce the role of the state and the military in the economy in favour of the private sector.

(Reporting by Aidan Lewis, Editing by Andrew Heavens and Philippa Fletcher)