Egypt Moves Ahead With IMF Loan Request as Lagarde in Cairo
Egypt’s president and top economic officials will meet today with the head of the International Monetary Fund, potentially moving closer to a $4.8 billion loan for an economy battered by last year’s uprising.
Christine Lagarde, the IMF’s managing director, is slated to meet with President Mohamed Mursi and Prime Minister Hisham Qandil to discuss the framework for the loan. The funding was requested more than a year ago and approval was stalled amid political infighting as the IMF requested broad consensus on an economic program.
Finance Minister Momtaz el-Saieed told the state-run al- Ahram newspaper that devaluing the Egyptian pound was not under discussion and that the IMF wasn’t imposing conditions on the loan. He separately told the financial daily al-Borsa that Egypt would withdraw the funds in a lump sum, using the money to finance a budget deficit and boost foreign currency reserves.
Egypt’s international reserves have declined by around 60 percent since the start of 2011, to $14.4 billion by the end of July, according to central bank figures. The pound is projected to drop 5.3% to 6.41 per dollar by the end of the year, according to the average of five analyst estimates compiled by Bloomberg.
Egyptian officials, including el-Saieed, have said the IMF funds will encourage other funding for Egypt, which has seen its borrowing costs surge by 50 percent since the start of last year’s uprising.
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