Thursday 18 December 2014
 
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$4.8bn LOAN TALKS

IMF team to arrive in Egypt on Wednesday

Cairo, March 31, 2013

An IMF delegation will arrive in Egypt on Wednesday for talks with the government on a $4.8 billion loan, a government spokesman said on Sunday, as Cairo seeks to conclude a deal vital to easing a deep economic crisis.

Egypt would not seek any emergency loan from the International Monetary Fund and faced no "crisis" in funding the import of essential commodities, spokesman Alaa El Hadidi added.

The most populous Arab country has been seeking a loan from the Fund to ease economic strains after two years of political upheaval. Reserves of foreign currency have fallen to critically low levels, threatening Egypt's ability to import essential supplies of fuel and wheat.

President Mohamed Mursi's government initialled a deal with the IMF last November but postponed final ratification in December in the face of unrest triggered by a political row over the extent of his powers.

Hadidi, seeking to allay public concerns over power cuts and long queues at petrol stations, ruled out an emergency loan, as suggested by the IMF. He added that the country was still able to buy essential imports.

"(The supply) of wheat and loaves of bread is safe," he told reporters. He added that indications of a higher harvest this year meant Egypt would use locally-grown wheat in the place of wheat that would otherwise have been imported.

He played down as "speculation" repeated media reports that Egypt was seeking aid from Arab states Libya and Iraq. "Egypt seeks to boost investment from these countries and an opening of their labour markets (for Egyptians)," Hadidi said.

WEAK CURRENCY

The IMF said last week a technical delegation would visit Cairo in the "first days of April".

Masood Ahmed, director of the IMF's Middle East and Central Asia department, visited Cairo on March 17, saying the Fund would continue talks aimed at agreeing possible financial aid.

Any deal with the IMF is likely to require Egypt to commit to austerity measures, a very sensitive issue at a time when Mursi is facing protests over his management of the country.

Shortages of subsidised diesel have paralysed transport in parts of Egypt, as the Egyptian pound has lost 9 percent of its value against the dollar since late last year.

The government is working on an economic programme where it plans to cut back on subsidies of fuel. Last year it eliminated subsidies on 95-octane gasoline, the highest grade available, and it raised fuel prices in many sectors last month.

Mursi's cabinet has said it plans to implement a subsidised fuel rationing system at the beginning of July, though local media reports have said the plan, already delayed several times, could be pushed back to January. – Reuters




Tags: Egypt | Currency | Cairo | loan | IMF |

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