The International Monetary Fund is starting talks with Yemen on additional assistance that may be needed to supplement a $93.7 million credit earlier this year, the lender’s regional chief said.
Discussions with Yemen “are now starting up, so I would say between now and the end of the year we would have a clearer sense of how they would like to proceed,” Masood Ahmed, director for the Middle East and Central Asia, said in an interview today in Doha, Qatar. “If they need financial support or a framework within which financial support can be structured for others, then the fund would be ready to work with them.”
The fund is also ready to send a technical team to Egypt, which has requested a $4.8 billion loan, “as soon as the Egyptians have themselves gone through the internal process,” Ahmed said. “For us, it’s very important that any program that we support is one that is fully developed and owned by the authorities themselves, and that process is ongoing.”
Egypt and Yemen are seeking IMF loans as their economies struggle to recover from popular uprisings last year that ousted rulers in both countries. Egypt’s foreign-currency reserves have plunged by more than half while Yemen, the poorest Arab country, has said it needs $11 billion in external financing.
Last month, the IMF’s executive board approved a $6.2 billion liquidity line for Morocco and a $2 billion standby arrangement for Jordan. Jordan’s King Abdullah II earlier this month scrapped a planned increase in fuel prices, part of the IMF-backed effort to trim the budget deficit, after protests broke out.
Raising fuel prices “is socially and politically difficult,” Ahmed said. The government must decide “how best to make the trade-offs that will enable them to meet the benchmarks they have set.”