Egypt Sees IMF Return in Two Weeks as Currency Extends SlideTarek El-Tablawy and Abdel Latif Wahba
An International Monetary Fund team is due to return to Egypt in two to three weeks, President Mohamed Mursi’s spokesman said today, as the country’s currency resumed its slide against the dollar.
Negotiations will pick up from their previous point and there will be “no changes” to the economic program the government has presented to the IMF, presidential spokesman Yasser Ali told reporters. He said the IMF won’t impose conditions.
The loan, for which Egypt had signed a preliminary accord only to delay the request amid political turmoil last month, is seen as pivotal in reviving an economy struggling nearly two years after Hosni Mubarak’s ouster.
Mursi’s Islamist government faces a challenge in implementing cost-saving measures ahead of parliamentary elections later in the year. Such cuts may cost it backing among a population increasingly impatient with the lack of economic progress and security after last year’s revolution.
The budget deficit is projected to widen to 11.4 percent in the fiscal year ending in June, from 11.2 percent. The government says an IMF deal will help open the door for other aid and investment.
The head of the fund’s Middle East and Central Asia department, Masood Ahmed, met with Mursi and other top officials yesterday in Cairo and said the IMF remains “committed to support Egypt in addressing its increasing economic challenges.”
The IMF needs “the commitment of the political authorities that can actually endorse the program, own it and propose it to the population as theirs,” Managing Director Christine Lagarde said in Abidjan, Ivory Coast, today.
The push to resume negotiations comes after the biggest slide in the Egyptian pound since the uprising. It has slumped almost 5 percent in the past two weeks, exceeding the decline since the start of 2011. The pound extended losses today, dropping 0.6 percent to 6.4823 a dollar as of 3:20 p.m. in Cairo.
The central bank, which spent almost 60 percent of its reserves in the past two years, has introduced dollar auctions to limit the amount of foreign currency banks can buy.