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Egypt PM says IMF to return to Cairo within 2 weeks

Published: Updated:

Egypt’s prime minister met the head of the International Monetary Fund (IMF) on Thursday and said an IMF mission would return to Cairo within two weeks for talks on a $4.8 billion loan for the financially troubled country.

Hisham Kandil told a news conference he had told IMF Managing Director Christine Lagarde that Egypt would carry out some of the reforms required by the global lender before a general election due in April, and others would come later.

He said he hoped the frequently delayed IMF talks were now on track and a loan agreement could be concluded in the next round of talks.

A deal on the IMF loan had been expected last month but was postponed because of political instability, triggering a plunge in the Egyptian pound to record lows.

Egypt has been in an economic slide since a popular revolution overthrew authoritarian ruler Hosni Mubarak two years ago, bringing a government led by the Muslim Brotherhood to power.

The pound has lost about 7 percent of its value in less than a month and is now 12 percent weaker than it was before the early 2011 uprising.

An IMF source said the Fund was waiting for Egypt to send an updated program and if it was satisfactory, a delegation would return to Cairo, possibly in two weeks, to resume discussions.

The source said the IMF was waiting to see whether the government had gone all the way in liberalizing exchange rates and some points on the state budget were also still under discussion.

Kandil rejected concerns about the sharp depreciation of the currency in recent weeks, saying it was good for exports and for foreign direct investment in the country.

Financial aid from the Gulf is buying Egypt’s government time as it battles to prevent a currency collapse, though Cairo may not be able to afford much more delay in securing a loan from the IMF.