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Egypt to request $1bn from World Bank and African Dev Bank: Planning Minister

Planning minister says the government will request new loans and issue depository receipts so Egyptians living abroad can support the economy

Reuters and Ahram Online, Thursday 26 Jan 2012
Egypt is eyeing further dollar infusions (Photo: Reuters)
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Views: 1338

Egypt said on Thursday it would ask the World Bank for a $500 million loan and another $500 million from the African Development Bank to help it fill a budget gap widened by a year of political and economic turmoil.

Planning and International Cooperation Minister Faiza Abo El-Naga, speaking to reporters, said Egypt had also persuaded the International Monetary Fund (IMF) to reduce the interest rate it would charge on proposed $3.2 billion budgetary support package.

"We have achieved a reduction from the IMF on the interest rate on the loan from 1.5 to 1.1 percent," she said, adding that this would put it more in line with interest rates worldwide.

Egypt would request a mission from the World Bank come to Egypt soon, she said, without giving details or a date.

Abo El-Naga also indicated that the government is considering issuing Depository Receipts for Egyptians in the diaspora who want to support the Egyptian economy.

She added the Central Bank of Egypt is looking into methods to issue such receipts in the near future.

Egypt has been tapping into all available resources to help keep its planned 8.6 per cent budget deficit on target. The government has exhausted borrowing from the local market; which saw yields on treasury bills surge to over 15 per cent. 

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