IMF to visit Egypt for loan talks in late March

IMF to visit Egypt for loan talks in late March

The International Monetary Fund said on Thursday a delegation will visit Egypt later in March for discussions on an IMF lending program after Egyptian authorities recently submitted economic plans to the global lender.

March 10, 2012 5:05 by Reuters

“We have now received a document that describes in broad terms their economic program,” IMF spokesman Gerry Rice told reporters. “In coming days our staff will be studying that document and assess the policies, and … we expect to schedule a mission to Cairo in the second half of March,” he added.

The talks will cover details of the economic program and a possible IMF arrangement, he added.

Egypt has requested a $3.2 billion lending program from the IMF to help plug a widening budget and balance of payments deficit.

Rice said it was important that any IMF-backed program had the broad support of all political groups in Egypt, following a year of political turmoil that toppled longtime leader Hosni Mubarak. A military council is set to rule until the end of June when it said it will hand power to an elected president.

Political turmoil and elections could complicate negotiations with the IMF and the country’s commitment to sticking with an economic program.

“We stress the greatest importance on this program being homegrown and having broad political ownership,” Rice added.

Egyptian Finance Minister Mumtaz al-Saeed was quoted on Feb. 19 as saying the IMF loan would support the 2012/13 budget and compensate for the depletion of Egypt’s foreign reserves.

Economists estimate Egypt will need up to $12 billion in external funding over the next year and a half. The country is also in talks with the World Bank on $1 billion in budget financing.