Egypt requests $4.8b loan from IMF
Egypt on Wednesday formally asked the International Monetary Fund (IMF) for a $4.8 billion loan to boost the her sagging economy, and said it expects to reach a final agreement by the end of the year, reports AP.
Egypt’s finances have been badly battered by the political turmoil that has roiled the country since last year’s popular uprising that ousted longtime leader Hosni Mubarak, and securing a loan would help shore up confidence in an economy that has seen tourism revenue and foreign investment dry up and foreign currency reserves plummet by more than half.
State TV said Egypt’s leaders requested the $4.8 billion loan during a meeting Wednesday with IMF chief Christine Lagarde in Cairo.
Speaking to reporters after the talks, Prime Minister Hesham Kandil said Lagarde’s visit “gives a positive message to Egypt and the whole world that Egypt is stabilizing and that the economy is heading to a recovery.”
Kandil said the loan will be doled out in five phases, with an interest rate of 1.1 percent, and that he expects to reach a final agreement with the IMF by no later than December.
Lagarde, however, said that she didn’t discuss the details or the amount of the loan but that the prime minister had a “figure in his mind.”
Kandil’s government has been holding meetings with top IMF officials over recent days and the details about the deal appeared to have been discussed during those meetings.
Kandil said his government has drawn up an economic plan for the IMF that includes strategies to counter the budget deficit of 144 billion Egyptian pounds ($23.6 billion), encourage investment and ensure that subsidies reach those most in need.
Egypt’s Finance Minister Momtaz el-Said told the state-run Al-Ahram newspaper in remarks published Wednesday that Cairo hoped to increase the loan from the initial $3.2 billion discussed earlier this year to $4.8 billion to cover the budget deficit that has grown because of shrinking tourism revenues and foreign investment since last year’s uprising.
Egyptian government is finding it harder and harder to import fuel. The government’s credit with foreign banks and traders has either been pulled or they are charging high premiums for fuel as the country struggles to right itself after last year’s Arab Spring.