Senior IMF official to visit Cairo, discuss $4,8bn loan

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A SENIOR International Monetary Fund (IMF) official is set to meet with Egyptian leaders today to discuss the $4,8 billion loan agreement that was postponed last month at Cairo’s behest because of political turmoil in the country.

Report by Reuters

The IMF’s Middle East and Central Asia director Masood Ahmed will visit Cairo to meet with Egyptian officials to discuss recent economic developments and “possible IMF support for Egypt in facing these challenges”, the IMF said in a statement released on Saturday in Washington.

Major State-run Egyptian newspaper Akhbar Al-Youm reported that he would meet with Egyptian President Mohamed Morsi, Prime Minister Hisham Kandil, some ministers and the central bank governor.

In another development, Egypt’s Finance and Interior ministers will be replaced, the State news agency said on Saturday, in moves promised by Morsi to assuage public anger over an economic crisis.

Cabinet sources confirmed the moves.The IMF loan is seen as crucial to easing Egypt’s budget deficit and an economic slump caused by the turmoil that followed the popular uprising that ousted autocratic leader Hosni Mubarak in February 2011.

Egyptians began the new year in an atmosphere of growing anxiety, with few expecting any quick solutions as political infighting continues before a parliamentary election expected to get underway within two months.

Egypt’s currency has lost about 10% against the dollar since the start of 2011.

But about a third of that plunge has come in the past week alone since the central bank began auctioning $75 million a day out of its reserves on December 30.

The pound slid further on Thursday at the central bank’s fourth auction of foreign currency, with $74,9 million sold to banks at a cut-off price of £6,386 pounds, weaker than Wednesday’s 6,351 to the dollar.

The IMF said last week that it welcomed steps that Egypt had taken to stop a drain on its international reserves, which had driven the Egyptian pound down to record lows.

Egyptians have rushed to buy dollars for fear of a messy devaluation, and banks have been forced to impose limits on dollar withdrawals to prevent a run on deposits.

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