CAIRO: Egypt and the International Monetary Fund (IMF) are pushing forward on efforts to agree on the stipulations for a loan from the world financial body, said IMF Managing Director Christine Lagarde, who was in Cairo to meet with President Mohamed Morsi on the potential loan deal. Egypt is requesting $4.8 billion in loans from the IMF, and Lagarde said in a statement issued by the global body that a technical team would be arriving in Egypt next month to work forward on the request. She was in Egypt for the first time as IMF Managing Director to meet with Morsi, Prime Minister Hisham Qandil, Finance Minister Mumtaz Said and other top government officials on the loan deal, which has in recent months come to a near halt. “I congratulated President Morsi on his election and thanked him and Prime Minister Kandil for their kind invitation,” she said. “I took note of their strategy and ambition for Egypt's economic and social future, and I assured them of our continued commitment to support Egypt and its people during this historic period of transition. The IMF will accompany Egypt as it undertakes this challenging journey.” The loan deal is seen as vital to assist Egypt in being able to avoid a budget and balance of payments crisis as well as deliver more credibility to economic reforms to boost the ability to attract investors. “The IMF has maintained a close dialogue on economic policy with the Egyptian authorities since the start of the transition and provided considerable technical assistance upon request from the government,” Lagarde continued in her statement. She said that as a response to the Egyptian government's request for a loan deal, the IMF would move as quickly as feasibly possible to make this a viable reality. “We are responding quickly to this request. A technical team will be arriving in Cairo in the early September to work with the authorities on their program and discuss possible forms of financial support from the IMF,” she said, without giving specific details on the potential loan and dollar amount. “Egypt faces considerable challenges, including the need to restart growth and reduce budget and balance of payments deficits. Getting the country's economy back on track and raising the living standards for all will not be an easy task. The Egyptian people have legitimate expectations for a better life and greater social justice. We at the IMF, stand ready to help," Lagarde added. Last month, IMF officials hinted that a loan agreement would not be made this year, sparking worries that Egypt's economic crisis could widen. According to a report by Bloomberg business news agency, “the IMF requires approval from the biggest party in parliament," the official said, speaking on the condition of anonymity because of the sensitivity of the talks. “It's disappointing, but at least it's been announced against the stabilization of reserves," Richard Fox, London- based head of Middle East and Africa Sovereigns at Fitch Ratings, said by phone to Bloomberg. “If they can maintain reserve levels and continue progress toward political transition it's not the end of the world. Still, the fact that things have been pushed back yet again isn't positive." Egypt's state-owned al-Ahram newspaper had reported that a deal was to be signed in June, but the IMF had urged certain procedures were needed in order for the loan to be granted. Masood Ahmed, IMF director for the Middle East and North Africa, said in late May that Egypt still needed to do “some technical work" to finalize its economic program. Masood has claimed there are three important steps that Egypt should take if it wants to go further in the loan procedure with the IMF, referring to the economic program, political support and alternative financial sources. “I think that process (of getting political support) is advancing but I do not think we are at the point yet where we could move forward." “There's still more work to be done to close down those three areas," he said, referring the three important steps to secure the loan.
