CAIRO: Egypt's government said on Thursday that it was to ask the World Bank for a $500 million loan and the same amount from the African Development Bank as it attempts to overcome the budget pitfalls that have left the country's economy struggling since the popular uprising ousted the former regime in February 2011. Planning and International Cooperation Minister Faiza Abu al-Naga told reporters that the country has persuaded the International Monetary Fund (IMF) to drop interest rates on a $3.2 billion loan the government had requested. “We have achieved a reduction from the IMF on the interest rate on the loan from 1.5 to 1.1 percent,” she said, adding that this would put the cost of the finance more in line with interest rates worldwide. The IMF said earlier this month that there would be no stipulations on the proposed loan to Egypt. Masood Ahmed, the director the of the IMF's Middle East department, said that he would like to see Egypt produce a two-year reform program, with approval from all leading political factions. Negotiations about the loan, originally proposed last June, were reopened this past week in Cairo. Egypt's budget deficit has reached EGP 144 billion (US $24 billion), as the state's economy suffers through a period of political turbulence in the wake of popular uprisings that ousted the regime of former President Hosni Mubarak last February. Some had feared that the privatization and deregulation conditions traditionally tethered to IMF loans could have compromised Egypt's economic sovereignty and revert the country back to failed Mubarak-era policies. The Supreme Council of the Armed Forces (SCAF), Egypt's interim ruling body has vacillated in its position on the loan through the appointment of three different finance ministers since rejecting the package last June. However, Egypt's economy is now in dire need of assistance. Amid the instability, rumors of petrol shortages and price hikes have caused chaos across Egypt since Sunday, as cars wait in gridlocked queues at pumping stations in order to fill up on gas. Egypt's Petrol Authority says that they have no intention of hiking prices or ending gas subsidies, and blame the shortages on fuel hoarding, a consumer habit caused by the rumors. BM ShortURL: http://goo.gl/UWP2W Tags: Budget, IMF, Loan, World Bank Section: Business, Egypt, Latest News
