Egypt’s External Debt Would Reach $53.4 Billion With IMF Loan

Egypt’s external debt  would reach $53.4 billion if it received an international Monterey Fund  (IMF) loan said Egypt’s finance minister said in a television interview, according to Reuters.

Egypt announced last week that it was seeking $4 billion a year over three years from the IMF to help plug a funding gap.

The government aims to finalise the deal in August.

The Egyptian economy has been struggling as it faced one of its harshest downfall in its history. It suffered from shortage of foreign currency due to the withdrawal of tourism and foreign investments which were among the main sources of foreign currency. Moreover, the shortage of foreign currency has led to unprecedented rise of the dollar exchange rate relative to the Egypt’s currency. The Central bank of Egypt(CBE) has devalued the Egyptian pound last March with amid speculation of another devaluation in the coming period.

In this context, a two-week IMF mission arrived in Cairo over the weekend to negotiate an IMF loan package.

The IMF is urging Egypt to adopt a more flexible exchange rate policy as part of talks for a USD 12 bn assistance package according to a government source close to the negotiations. The request came up during a meeting of the Coordination Council chaired by Prime Minister Sherif Ismail.

Other key points during the IMF talks have so-far included the need to set a clear timable for implementation of reforms  and the grace period for the repayment of the first tranche of the facility.