News / Middle East

Egypt Expects IMF Loan Agreement Soon

Egyptian protesters hold placards with the Arabic inscription reading ‘danger’ and shout slogans as they demonstrate against the International Monetary Fund (IMF) delegation visit in Cairo, April 3, 2013.
Egyptian protesters hold placards with the Arabic inscription reading ‘danger’ and shout slogans as they demonstrate against the International Monetary Fund (IMF) delegation visit in Cairo, April 3, 2013.
Reuters
Egypt's planning minister said on Thursday the government expects to reach a final agreement with the International Monetary Fund (IMF) on a $4.8 billion loan within two weeks, the state news agency MENA reported. Ashraf al-Araby also said that Cairo had not requested an increase in the amount of the loan, needed to avert a deepening economic crisis.

An IMF delegation resumed long-delayed negotiations with Egypt on Wednesday and government officials have said the team is expected to stay until April 15.
    
The IMF has set no timeline for a deal and some private economists are skeptical that an agreement can be reached before parliamentary elections later this year because of the need to implement unpopular tax rises and subsidy cuts.

After two years of political upheaval, foreign currency reserves have fallen to critically low levels, limiting Egypt's ability to buy wheat, of which it is the world's biggest importer, and fuel.

Foreign reserves dipped further to $13.4 billion at end-March, the central bank reported, down from $13.5 billion a month earlier, equivalent to less than three months' imports.

Cairo must convince the global lender it is serious about reforms aimed at boosting growth and curbing an unaffordable budget deficit. That implies tax hikes and politically risky cuts in state subsidies for fuel and food, including bread.

The government reached a preliminary agreement with the IMF
on the loan last November but went back on implementing the economic conditions in December amid political unrest over the extent of President Mohamed Morsi's powers.

In a statement coinciding with the IMF team's visit, Oil Minister Osama Kamel said the government aims to phase out subsidies for bread, other basic foodstuffs and oil within three to five years.

"We are considering starting to increase salaries and decrease subsidies until we manage to completely eliminate subsidies in three to five years,'' Kamal said in an interview with state-run Al-Ahram newspaper.

Just before the visit, the government announced an increase in the price of subsidized cooking gas. But it has postponed plans to ration subsidized fuel using smart cards until July 1 and some reports say that date may be pushed back further.

The Egyptian pound has lost nearly one-tenth of its value against the dollar on the official market this year and has fallen more sharply on the black market in the last few days due to dwindling supplies of the U.S. currency.

The dollar is now worth 17 percent more in unofficial trading than the official rate, said Mohamed Radwan, director of international sales at Pharos Securities.

The Cairo bourse fell to a 2013 low on Wednesday as foreign investors sold stocks on fears that Egypt's currency would be further devalued. The stock market index recovered slightly on Thursday.

You May Like

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Battle With Islamic State Militants Carries Domestic Risks

Despite Western concerns that IS militants are preparing a Jordanian offensive, analysts call the kingdom's solid intel a strong deterrent More

Asian-Americans Assume Office in Record Numbers

Steadily deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video Comanche Chief Quanah Parker’s Century-Old House Falling Apart

One of the most fascinating people in U.S. history was Quanah Parker, the last chief of the American Indian tribe, the Comanche. He was the son of a Comanche warrior and a white woman who had been captured by the Indians. Parker was a fierce warrior until 1875 when he led his people to Fort Sill, Oklahoma, and took on a new, peaceful life. As VOA’s Greg Flakus reports from Cache, Oklahoma, Quanah’s image remains strong among his people, but part of his heritage is in danger of disappearing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid