Egypt expects at least $2 bln loan from IMF within 2 months
CAIRO, July 28, (RTRS): Egypt expects to receive at least $2 billion within two months of agreeing a three-year $12 billion loan programme with the International Monetary Fund, a senior finance ministry official said on Thursday.
Egypt announced late on Tuesday it was seeking $4 billion a year over three years from the IMF to help plug a funding gap and restore market stability. The government hopes to finalise the deal when an IMF team begins a two-week visit to Cairo on July 30.
The Egyptian economy has struggled since the 2011 uprising ended Hosni Mubarak’s 30-year rule and ushered in a period of turmoil that scared off foreign investors and tourists — both significant earners of hard currency.
At a news conference on Thursday, deputy finance minister for monetary policy Ahmed Kojak said that each tranche of the IMF loan would have to repaid within five years, which will include a three-and-a-quarter year grace period.
“If an agreement happens with the IMF we will receive the first tranche within two months, with a minimum $2 billion.”
Egypt has already said it expects to secure the IMF lending programme at interest rates as low as 1 or 1.5 percent.
The country is also planning to issue $2 billion to $3 billion in international bonds in September or October.
Kojak said Egypt would next week begin seeking out international institutions to arrange that eurobond issue.
He said the proposed IMF deal was only part of Egypt’s programme to turn around an economy.
Egypt is also expecting the African Development Bank to approve in September the release of the second tranche of a $1.5 billion three-year loan programme signed in December, Kojak said. Egypt has already received the first $500 million tranche.
Finance ministry spokesman Ayman al-Kaffas said the release of the next tranche hinged on Egypt implementing eight reforms including in the energy, power, trade and industry sectors. He said measures related to reforming the administration of public funds had already been completed by the finance ministry.