The International Monetary Fund has denied reports that it signed an agreement to loan Egypt US$3.2 billion, the Freedom and Justice Party said Tuesday.
Abdel Hafez al-Sawy, head of the FJP’s internal economic committee, told Al-Masry Al-Youm that during its meeting Monday with FJP President Mohamed Morsy, the IMF delegation headed by Masood Ahmed reiterated that it had not signed any initial agreement with the government.
Ahmed pointed out that his current visit to Cairo aimed to determine the position of Egypt’s political forces toward the loan to ensure broad political consensus on it.
Sawy said FJP had no objections to the principle of borrowing money from international financial institutions, provided it was in the country’s best interest.
The IMF said it would only agree to the $3.2 billion if the government first obtained the approval of countrywide political forces over a financial reform plan. It sought a green light from the FJP in particular, which holds over 40 percent of seats in the Parliament. The IMF had requested that Egypt prepare an economic reform plan with benchmarks and targets, in addition to funding commitments from other donors.
The Egyptian government says it needs the loan to help plug an estimated $11 billion budget deficit.
The government has spent more than $20 billion in foreign reserves to support the Egyptian pound since the 25 January uprising erupted last year. Egypt’s net foreign reserves have dropped by 3.6 percent to $15.7 billion, including $4 billion in gold bullion that the government may be reluctant to spend.
Translated from Al-Masry Al-Youm
