By Patrick Werr and Marwa Awad / Reuters
CAIRO: Talks over an International Monetary Fund loan for Egypt are continuing and will take a few weeks, rather than days, to conclude, IMF Middle East and Central Asia director Ahmed Masood told Reuters on Monday.
Egypt formally requested a $3.2 billion IMF loan earlier this year and the government has said it hopes to seal an agreement this month.
The loan itself would not solve Egypt’s economic problems but it could pave the way for funds from other major donors and signal that the government is moving to avert a fiscal crisis caused by a year of economic turmoil and policy paralysis.
“Our technical team, if all goes well, will be here for the next couple of weeks. We view this process will take a few weeks rather than something we will resolve in days,” Masood said after talks with members of the Muslim Brotherhood, which controls the biggest bloc in Egypt’s parliament.
The IMF has asked Egypt to draw up an economic reform plan with benchmarks and targets, to line up aid pledges from other donors and sell the plan to the country’s political forces, especially the Muslim Brotherhood’s Freedom and Justice Party (FJP), which won nearly half the seats in the new parliament.
The FJP has said it supports Egypt’s request for an IMF loan but first wants the government to produce a coherent plan to battle corruption and get costs under control.
In a sign that the negotiations are not going as smoothly as they might, FJP economic committee member Ahmed Naggar said Egypt’s army-backed interim government had not provided enough details about its real financial circumstances.
“And therefore the FJP can neither agree to nor reject the loan unless the government gives us the necessary details to study and then decide,” he told Reuters after meeting the IMF officials on Monday.
Egypt has spent more than $20 billion in foreign reserves since last year’s uprising to prop up its currency. Reserves now stand at a worryingly low $15.7 billion, including $4 billion in gold bullion the government would be reluctant to draw down.
