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Egypt requests $4.8 bn IMF loan during Morsi Lagarde meeting

Egypt's president requests a $4.8 billion loan during his meeting with the IMF's Christine Lagarde on Wednesday morning

Reuters and Ahram Online, Wednesday 22 Aug 2012
Christine Lagarde
Egypt's President Mohamed Morsi (R), Prime Minister Hisham Kandil (C), Finance Minister Mumtaz al-Saeed (L) and Governor of Egypt's Central Bank (CBE) Farouk El-Okdah (2nd L) meet with IMF Managing Director Christine Lagarde at the Presidential Palace in Cairo (Photo: Reuters)

Egypt has formally requested a $4.8 billion loan from the International Monetary Fund, the presidential spokesman said on Wednesday during a visit to Cairo by IMF chief Christine Lagarde.

"We have officially requested a $4.8 billion loan from the IMF and talks are currently going on inside about the request," spokesman Yasser Ali told Reuters as Lagarde held discussions with President Mohamed Mursi. He said any details would be announced later.

International Monetary Fund (IMF) Managing Director Christine Lagarde arrived in Cairo on Wednesday to reopen fresh discussions on a fiscal package, after year-long negotiations between Egypt’s government and the international financial organisation.

She initiated her visited by meeting President Mohamed Morsi, and is expected to meet the cabinet's economic group later.

Egypt’s Finance Minister Momtaz El-Said confirmed last Wednesday, that Egypt will be pushing for an increased loan of $4.8 billion up from $3.2 billion to help bolster Egypt’s flailing economy, which has seen widening state budget deficit and a balance of payment deficit largely stemming from a decline in tourism and shortage of foreign investment since last year’s popular uprising.

Foreign reserves have also fallen to well below half levels seen before the ouster of Hosni Mubarak.

Morsi’s administration will present Lagarde with a new economic programme that has an emphasis on “social justice”, Abdallah Shehata, economic advisor to the president, told Ahram Online last week.

Few details about the programme have been made public, however El-Said told Al-Ahram daily on Tuesday that one of the main focuses will be making subsidies more efficient by limiting waste and ensuring the financial support reaches the people in the most need.

Egypt’s initial financial plan, drafted by Kamal El-Ganzouri’s government back in February, was scrapped following political disagreements between the Muslim Brotherhood dominated parliament, Ganzouri’s cabinet and the military council, who were ruling the country.

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