IMF Egypt resume talks over 48 bn loan MENA

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A delegation of the International Monetary Fund and Egyptian premier Hisham Qandil resumed talks on Monday over a $4.8 billion loan to help revive Egypt’s dilapidated economy, the official MENA news agency said.

The delegation led by Masood Ahmed, the Fund’s representative for the Middle East and Central Asia, arrived on Sunday in Cairo and is also expected to meet Islamist President Mohamed Mursi.

The loan had been agreed in November but talks were suspended a month later amid fresh political tensions in the country, with Mursi facing his worst crisis since his election in June.

The crisis was triggered partly by a referendum on a controversial new constitution backed by Islamists and rejected by secular-leaning opposition, which was eventually approved by nearly 64 percent of the Egyptian electorate.

Cairo has sought to revive the talks for the IMF loan, which is seen as vital for restoring confidence in the Egyptian economy. The loan is also expected to unlock further international support to Cairo.

Discussions for the loan will focus on “the most recent economic developments, their [the Egyptian government’s] policy plans for addressing Egypt’s economic and financial challenges, and possible IMF support for Egypt in facing these challenges,” the Fund said on Sunday.

Egypt faces a severe economic crisis, with its foreign exchange reserves at a “critical minimum” level, its budget deficit soaring, and its currency sliding to around 6.4 Egyptian pounds to the dollar.

With a view to tackling the economic crisis, Mursi reshuffled his cabinet on Sunday, bringing in 10 new faces, including a new finance minister.