Egyptian Finance Minister Samir Radwan (left), speaks at a US-Egypt Business Council luncheon as Planning and International Cooperation Minister Fayza Mohamed Aboulnaga looks on ahead of the Spring Meetings of the International Monetary Fund in Washington on April 14.
A team from the International Monetary Fund (IMF) is expected to visit Egypt in response to a request by the country for assistance, according to a statement by an IMF spokesperson.
“The Egyptian authorities had indicated that they had expected to have a financing need of some $10-12 billion from now through June 2012 from the international community” says Caroline Atkinson, director of the External Relations department at the IMF. “They’ve approached bilateral and multilateral partners, including the IMF, to provide the financial support for what is their home-grown program.
“We expect that an IMF team will visit Cairo shortly to begin discussions with the Egyptian authorities on an arrangement. The size and scope of Fund support will be defined as discussions progress,” the statement adds.
The statement comes after Egypt’s finance minister, Samir Radwan, said in an interview with Al-Shorouk daily last week that the IMF will be Egypt's “lender of last resort” because of its stringent conditions.
Egypt is trying to raise foreign resources as the economy witnesses a drop in outside investments as well as dwindling tourism and export receipts.
The country is currently negotiating the cancellation of a part of its foreign debt. Initial reactions to such a move have been welcomed by the EU but rejected by Egypt’s main bilateral lender, the USA.
Figures from the Central Bank of Egypt for early 2011 show the country's total external debt to be $34.992 billion, its highest level in more than five years.
Loans from international and regional organisations currently top $10.528 billion, a figure that has risen almost without interruption for the last half-decade even as the total debt figure has fluctuated.
Now, however, both are rising. Between 2009 and 2010 alone, foreign debt climbed 7 per cent, partly due to the Egyptian pound slipping. Every year, $1 billion is paid to the EU to service its debt, with $350 million going to the US.