In the Middle is Egypt's minister for International Cooperation, Sahar Nasr, during the IMF-WB annual meetings in Lima, Peru. 11 October 2015. (Photo: Nevine Kamel)
Egypt is negotiating with the International Monetary Fund (IMF) for a $5.5 billion loan to support the state budget, International Cooperation Minister Sahar Nasr was quoted as saying by the Middle East News Agnecy (MENA) on Thursday.
Egypt has embarked on a fiscal reform programme since the election of President Abdel-Fattah El-Sisi in June 2014 in hopes of reducing the budget's widening financing gap.
The country’s financing gap is estimated by the IMF at $20 billion over the coming two years, the fund director for the Middle East and North Africa, Masood Ahmed, said during the annual meetings in Peru last week.
Last month, the IMF concluded a visit to Egypt in which it approved of the measures taken by the government and the Central Bank recommending further subsidy cuts, introducing a value-added tax and further devaluation of the pound.
In the last fiscal year, Egypt cut fuel subsidies, raising prices by up to 78 percent at the pump, but so far no further fuel cuts have been made as the country, a net importer of oil, made use of falling oil prices.
The Central Bank devalued the pound further on Thursday to 7.83 against the dollar from 7.73 in the first official depreciation since July.
Egypt is facing a foreign currency crisis with the net foreign reserves falling for the third consecutive month to stand at $16.335 billion at the end of September.