Egypt's economy is in tatters. And making matters worse, an International Monetary Fund (IMF) delegation left Egypt this week and Egypt was still without a loan. It had been believed to be a finalization visit by the IMF for a $3.2 billion loan to the country, but squabbling by the government and the Islamist Parliament left Egypt with nothing. Now, it is unclear whether or not the loan will happen at all, despite only one month ago, the IMF stating publicly that it would meet in Egypt over the details of the loan to Cairo. According to a source close to the loan deal, the problem lies in the Egyptian government's desire to have lower interest and not be forced to have restrictions on the funds. “This is a major sticking point for the IMF because they want to guarantee the money is going to the appropriate channels and where it needs to go, but Egypt wants to make its own decisions,” the source told Bikyamasr.com on Saturday. With the country's worsening debt and a budget pitfall that could quickly rupture into massive economic turmoil, Cairo has to get its act together quickly, or the IMF could simply back out if it is too tiresome. The source added that with the current crises facing Egypt, “including the petrol situation, the government should act now to ensure the IMF doesn't have to deal with too much red tape, because at the end of the day they don't need to be there.” Still, Egyptian government sources remain positive and the finance ministry says that they are still “sorting through the details” for the loan, a sign that the IMF is still on board with delivering the package deal. In late February, the IMF said that the economic situation in Egypt remains “challenging” and that the economic growth for the country has stalled, “which harms the Egyptian economy and affects the people.” Gerry Rice, the spokesman of the IMF, stated during a press briefing in Washington, that the foreign exchange reserves have dropped significantly in Egypt, which led to the reduction of the authorities margin to maintain macroeconomic stability. Rice explained that the talks with the Egyptian authorities are ongoing and the IMF is ready to support a national program that includes the necessary action to rebuild confidence and the protection of vulnerable household.” He continued, “we do not have the program yet, and therefore will not go into details.” Egypt's Finance Minister Mumtaz El-Saeed said the Egyptian government would sign a memorandum of understanding with the IMF for a $3.2 billion loan. It also comes after Egypt reportedly requested a one billion dollar loan from the World Bank in an effort to fill the gaping budget deficit afflicting the country. BM ShortURL: http://goo.gl/Bs0ER Tags: Cairo, Egypt, featured, IMF, Loan Section: Business, Egypt, Latest News
