Egypt Near to Securing Cash Required for IMF Deal, Minister SaysBy
Government needs 2-3 weeks to settle credit lines: El-Garhy
Bond sale due early Nov.; U.S. election could bring volatility
Egypt is close to meeting an International Monetary Fund condition that it obtain several billion dollars of financing from other sources before a loan deal goes ahead, Finance Minister Amr El-Garhy said.
“We’re around that number, more or less,” El-Garhy said in an interview in Washington on Thursday, when asked about progress toward the IMF-stipulated figure of $5 billion to $6 billion. The fund is set to close a $12 billion loan for Egypt, and wants the North African country to demonstrate that it has access to other lines of credit too.
El-Garhy told an Institute of International Finance meeting earlier on Thursday that the government needs another two or three weeks to wrap up provision of other financing before it’s in a position to conclude the IMF accord. In the interview, he declined to discuss the sources of funding, but said that various deals are done or pending. “Some have been completed, some are still in the final fine-tuning phase.” He said the loan process with the IMF is “going well” and that “the fact that we are still completing certain issues does not mean there are any hiccups.”
Egypt has turned to the IMF as it seeks to revive an economy hobbled by years of political instability, and lure back investors who fled the country after the 2011 uprising and haven’t returned.
The government under President Abdel-Fattah El-Sisi, a former army chief, has relied on allies in the Persian Gulf to keep the economy afloat. Egyptian officials have previously said that those oil-rich nations will contribute some of the money required by the IMF.
Egypt has also announced plans to sell between $3 billion and $5 billion in international bonds. El-Garhy said the target date for the sale would be late October or early November. “Hopefully something will be clear by then about the U.S. elections,” he said. “Markets have become very anxious.”
Asked whether volatility caused by the vote could influence the schedule for Egypt’s sale, he said the government is working with its advisers “on what we need to do and on the timing.”
In his speech at the IIF, El-Garhy declined to comment on a potential devaluation of the currency as part of any IMF deal. Egypt’s pound has dropped to record lows on the black market in recent days on speculation that will happen. Meanwhile, the stock market has surged this week on bets that a devaluation will kickstart the economy.