BREAKING NEWS

IMF team discusses $4.8b. rescue loan for Egypt

By REUTERS

APRIL 3, 2013 15:46

CAIRO - An International Monetary Fund (IMF) team resumed long delayed negotiations with Egypt on Wednesday on a $4.8 billion loan to ease an economic crisis in the most populous Arab country, a government official said.

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.

President Mohamed Morsi's government initialed an IMF deal in November but postponed ratification in December due to unrest ignited by a political row over the extent of Morsi's powers.

The IMF mission met officials at the Finance Ministry and was expected to meet Prime Minister Hisham Kandil later.

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.

An IMF deal has long eluded Egypt, despite on-off talks first with an army-led government and now with Morsi's Muslim Brotherhood-led administration.

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