IMF loan to Egypt will carry lower interest rate: Ministry official

Ahram Online, Sunday 29 Jan 2012

Future borrowing from the global body will be at 1.12 per cent floating annual rate due to a worldwide drop in interest rates, says ministerial assistant

Photo: Reuters

The loan Egypt is set to receive from the International Monetary Fund (IMF) will likely come at a lower interest rate than the one agreed upon last June, the assistant to the minister of finance has told Ahram Online.

Hany Kadry said that a global drop in interest rates will lead to lower pricing for the proposed $3.2 billion facility.

An IMF delegation visited Cairo in mid-January to discuss a possible loan to support the Egyptian economy. The talks were described as "productive by the delegation" and another round is due to begin in a few weeks to conclude the loan agreement.

In June 2011, the IMF was very close to granting Egypt the $3.2 billion Stand-by Arrangement (SBA) at an annual floating interest rate of 1.5 per cent.

Kadry told Ahram Online that the new agreement will probably be very similar to the one sketched in June. The IMF delegation, however, did not indicate when the loan will finally be granted.

The IMF has posted an updated SDR rate for the week starting 23 January 2012 of 1.12 per cent per annum.

It dropped from 1.35 per cent in the fourth quarter of 2011 and 1.5 per cent the quarter before.

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