News / Middle East

Egypt to Resume IMF Loan Talks as Currency Weakens

Egyptian Prime Minister Hesham Kandil talks during a press conference at his office in Cairo, Egypt, December. 30, 2012.
Egyptian Prime Minister Hesham Kandil talks during a press conference at his office in Cairo, Egypt, December. 30, 2012.
VOA News
Egypt says it will resume negotiations in January for an emergency loan from the International Monetary Fund as the country's economic crisis deepens with the national currency weakening to an eight-year low against the dollar.

Egyptian Prime Minister Hesham Kandil said Sunday the requested $4.8 billion loan is small relative to the country's needs. But, speaking at a news conference, he said IMF assistance is important for restoring investor confidence in the economy.

The Egyptian government suspended its talks with the international lending agency earlier this month as it tried to deal with deadly street protests for and against a new constitution written by Islamist allies of President Mohamed Morsi. The protests coincided with a two-stage referendum that led to the charter's approval. Liberal groups who oppose the constitution denounced the referendum as illegitimate, citing its low turnout and allegations of fraud.

The political unrest has led many Egyptians to exchange their Egyptian pounds for dollars to try to protect the value of their assets. The pound weakened to an eight-year low of 6.3 to the dollar on Sunday. Egypt's foreign currency reserves also have dropped to $15 billion from $35 billion in 2010 as the government sold dollars to prop up the pound.

Prime Minister Kandil said the government will engage the public to try to build support for its plan to deal with the crisis. That plan includes unpopular tax increases and other austerity measures required by the IMF in return for a loan. Kandil said he hopes that there will be no major changes to those proposals.

Some information for this report was provided by AP, AFP and Reuters.

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Comment Sorting
by: ali baba from: new york
December 30, 2012 4:51 PM
IMF get the money from the contribution of western countries and United state . us pays us aids directly to Egypt and indirectly through IMF and other financial institution. Us is giving money even to muslim brotherhood. US is aware that Muslim brotherhood is controlling Egypt and Hamas as well .in the matter of fact Hamas helped moersi escaped from jail and moresi paid the favor back by shipment of building material to Gaza while he knows that there is a shortage of building material in Egypt and ignore the Egyptian need which many live in grave yard. us policy maker has to stop giving money to Egypt .our tax payee dollar is spending on terrorize organization and their cause to destroy western civilization and establish Islamic empire where Islamic law imposed and Muslim fanatic dream to use western woman as sex slave
In Response

by: Joseph Blosch
January 01, 2013 5:37 PM
The IMF does not need to be funding Egypt if the Egyptian government cannot create a national consensus on their Constitution. After all, the UN is not the Islamic Brotherhood's personal bank. If they want to hijack Egypt , they need to do it with their own money.

by: r.u.crazy from: USA
December 30, 2012 2:05 PM
Gee, where is the IMF going to get that kind of money? With countries, billions and trillions in debt one would wonder where does all this money come from. The same can be said of the U.N. If the world economy is on the skids, I would love for someone to explain to me where all this money is coming from. The printing presses surely must be running on overdrive.

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