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Egypt CB resumes talks over $3.2bn IMF loan

Central bank head Farouq El-Oqda relaunches negotiations with IMF in Washington for proposed $3.2 billion loan to Egypt, state press reports Sunday

Ahram Online, Sunday 13 May 2012
Farouk Elokda
Governor of the Central Bank, Farouk El-Oqda (Photo: Al-Ahram)
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Central Bank of Egypt (CBE) Governor Farouk El-Oqda has resumed talks with officials of the International Monetary Fund (IMF) in Washington over a $3.2 billion loan to Egypt, flagship state daily Al-Ahram reported on Sunday.

Official IMF sources expect delivery of the first tranche of the loan – worth a total of $1billion – in July, following Egypt's first post-Mubarak presidential elections slated for later this month, Al-Ahram reported.
 
El-Oqda's negotiations with the multilateral organisation will reportedly be based on the government's economic reform programme, leaked in March, which proposed raising public revenues and rationaling state subsidies.
 
IMF officials say they anticipate increased cooperation between Egypt's military-appointed government and recently-elected parliament, especially following a limited cabinet reshuffle on Thursday that saw four ministers – those of higher education, culture, manpower and parliamentary affairs – replaced.
 
Most members of the People's Assembly (the lower house of Egypt's parliament) rejected the government's economic proposals in late-April, further complicating government efforts to secure IMF assistance in resolving Egypt's ongoing balance of payments crisis.
 
The Popular Campaign to Drop Egypt's Debts, a grassroots Egyptian campaign demanding the wiping of the country's debt obligations, meanwhile, issued a statement in March condemning the interim government's proposals for economic reform. 
 
It claimed that the plans – ostensibly aimed at trimming the country's public debt – ignore long held popular demands for social justice and would ultimately serve to increase poverty in rural areas.
 
The Egyptian government expects to finalise the $3.2 billion loan by 15 May – a move it says is necessary to help tackle a looming $10-$11 billion financing gap over the next 18 months.
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