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Egypt ‘has mustered’ 60 percent of $6 bln required to secure IMF deal

Will also issue international bonds in second half of November or early December

Published: Updated:

Finance Minister Amr El Garhy said on Monday his country would gather an additional $6 billion in bilateral funding required to secure a $12 billion International Monetary Fund loan within one or two weeks, according to a Reuters report.

In comments on a talk show aired by local television channel CBC, he also said the government would submit an investment law to parliament within “one and a half months or more” and that Egypt would issue international bonds in the second half of November or the first week of December.

Last Thursday, Egypt received a $2 billion deposit from Saudi Arabia, as confirmed by a Egyptian Central Bank official. State news agency MENA quoted the official as saying the Saudi funds will help “boost the Central Bank’s cash reserves.”

The Egyptian government needs to secure $6 billion in bilateral financing for the first year of the three-year program to seal the deal and get final approval by the IMF's executive board.

The preliminary deal with the IMF was reached in August. The $12 billion three-year loan facility will help support the government’s reform program aimed at fixing budgetary gaps and rebalancing currency markets.

Bilateral support

But Cairo needs to secure $6 billion in bilateral support before the deal goes to the IMF board for approval.

Egypt needs the IMF loan to stimulate its flagging economy, rocked by recent years of political turmoil.

As part of a reform program, Cairo approved a value-added-tax of 13 percent.

According to Reuters, IMF also wants Egypt to focus monetary policy on easing the chronic dollar shortage and reduce inflation to single digits.