The International Monetary Fund official asserted on Friday that Qatar's US$5 billion aid for Egypt would not be a substitute for the stalled IMF's US$4.8 million loan to help the country undertake reforms. On the sidelines of the IMF and World Bank's Annual Spring Meetings in Washington DC, the IMF Middle East Regional Director Masood Ahmed said the Fund was still in talks to provide a multibillion-dollar loan to Cairo that is contingent on strong support from domestic political actors and a commitment to key reforms. Egypt has resumed talks over the US$4.8 million loan in Washington on the sidelines of the IMF and WB's annual spring meetings. Egyptian Central Bank Governor Hisham Ramez, Finance Minister Al-Morsi Hegazy alongside Planning Minister Ashraf Al-Araby are attending the annual meetings in pursuit of reaching a final agreement over the international lender's loan seeking to rescue the country's ailing economy. "There's a financing need that Egypt faces for the next 12, 18 months, and any financing that is provided is very useful in meeting that need," Ahmed said at the spring meetings of the IMF and World Bank. Ahmed called aid like that which Qatar announced last week, to help the Egyptian government as it increasingly faces strains on its finances, "helpful." "But it's not a substitute for the kind of measures that they (Cairo) have been putting together and that they want to move forward with, and that if we can reach would be a basis for an IMF-supported program." Last year the IMF reached a deal in principle to provide a US$4.8 billion loan to help finance the government while it undertakes reforms. The loan was close to completion in November when political changes in Cairo set it back. Ahmed assured that talks were still ongoing. A recent mission to the country "made good progress... and we're continuing those discussions." "There are still some areas in which the authorities are making sure that the data that they have is the most recent." "We're working together with them to make sure that the program will address the challenges that face Egypt, and will do so in way that protects the most vulnerable part of the society." But he declined to put a target date for completion of the talks. Earlier this month, CBE governor Hisham Ramez was quoted as saying: “The (IMF) loan will enable the country to avert a potential crisis temporarily, but the effective lasting solution is to achieve political stability and boost the national economy," he concluded. Egypt has secured $5 billion in stopgap financial support from Arab allies Qatar and Libya last week, removing some of the sense of urgency about obtaining the IMF loan. Arab allies Qatar and Libya gave cash-strapped Egypt a US$5 billion double boost on Wednesday as the Arab world's most populous nation struggles to secure an IMF loan to ease its deepening economic crisis. Qatari Prime Minister Sheikh Hamad Bin Jassim Al-Thani said after talks with Egyptian Prime Minister Hisham Kandil that Qatar would provide an extra $3 billion on top of some $5 billion the Gulf state has already given Cairo, and would extend gas supplies to Egypt this summer as needed. Economists said the government could muddle through for several months with funding from Arab sources, but only an IMF agreement would restore business confidence and investment. "It comes down to the fundamental question of whether Egypt can reform and achieve an economic recovery over the medium-term and that comes down to an IMF-backed program, which is the key to restoring the confidence of investors, who will not come back without an IMF deal," said Brahim Razgallah at JP Morgan. The IMF's conditions for lending were milder than past terms for Latin American and Asian countries, not least because the fund's main shareholders, the United States and European nations, see the strategic importance of stabilizing Egypt.
