(AFP Photo)
Egypt is negotiating to obtain a $465m loan from Arab Monetary Fund (AMF), said minister of finance Al-Morsi Hegazy to Reuters on Tuesday.
Hegazy is participating in the 36th annual meeting of the Board Governors of the AMF in Dubai, which held its meetings on Tuesday and Wednesday.
On the sidelines of meetings of finance ministers and central bank governors of Arab countries in Dubai, Turkey-based Anadolu reported that Hegazy said Egypt is “expecting the loan to be approved soon, especially in the shadow of the expected increase of Arab financial institutions capital by 50%, as a result of the the initiative started by Saudi Arabian King Abdullah Bin Abdul Aziz at an economic summit in Riyadh in January”.
“Foreign reserves in Egypt have slightly declined in March 2013 compared to February when they reached $13.5bn,” said Central Bank of Egypt Governor Hesham Ramez, who was part of the delegation in Dubai.
Regarding the relationship between Egypt and the AMF, the minister said that Egypt “is a founding member of the AMF, and we have a healthy relationship with the organisation”.
The AMF is a regional Arab financial institution founded in 1976, and based in Abu Dhabi, UAE. It began operations in 1977, with the number of Member States currently comprising 22 Arab countries.
“The AMF has recently pumped aid to Egypt worth $270m to finance a reform programme”, Hegazy added.
Economic expert Abdel Khaleq Farouq commented on the effectiveness of the summit: “It continues a series of plans based on the same old regime rules to handle the trade deficit; there are no serious strategies here.”
He added that “we need to reconstruct political financing to plug the deficit of both the general budget and the trade balance”.
“The current state of deterioration in the Egyptian economy may affect the loan agreement with the AMF, especially also given the current political situation,” he continued.
Farouq also believed that any delays in International Monetary Fund (IMF) $4.8bn loan may also negatively affect the negotiations over the loan from the AMF. Any lender, before granting a specific loan, refers first to criteria which are mostly related to the credit-worthiness of the recipient and the state of economy as well,” he explained.
