Egypt-IMF loan agreement postponed

Tuesday 11 Dec 2012

Prime Minister Hisham Qandil says Egypt has asked the International Monetary Fund to delay its approval of a $4.8 billion loan until next month

Christine Lagarde
File photo: International Monetary Fund Chief Christine Lagarde, second right, meets with Egyptian President Mohammed Morsi, right, in Cairo, Egypt, Wednesday, Aug. 22, 2012. (Photo: AP)

Egypt has asked the International Monetary Fund (IMF) to delay its approval of a $4.8 billion loan until next month due to domestic political circumstances, Prime Minister Hisham Qandil said at press conference on Tuesday.

"The government asked the IMF to postpone its decision concerning Egypt's $4.8 billion loan," he said.

"In light of the unfolding developments on the ground, the Egyptian authorities have asked to postpone their request for a Stand-By Arrangement with the IMF," an IMF spokeswoman confirmed in a written statement.

The IMF said it remained in close contact with the Egyptian authorities and was ready to continue supporting the country during the transition period. It would consult with the authorities on the resumption of discussions regarding the Stand-By Arrangement, it added.

The IMF board had previously said the loan would be discussed on 19 December.

Some analysts have said the move to delay the loan is a result of President Morsi's decision on Monday to reverse his previously announced tax rises and subsidy reductions on butane gas and electricity which were part of the IMF loan deal.

The Egyptian government has been in negotiations with the IMF about the loan since October 2011. 

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