Friction Between Egypt, Neighboring Countries Likely To Foil IMF Talks

The Minister of Finance, Mumtaz Al-Saeed, stated that the Egyptian government submitted an official request to the International Monetary Fund (IMF) to increase the requested credit facility from $3.2 billion to $4.8 billion. The Minister noted that the loan is expected to be received by November.

On a related note, the IMF chief announced that the loan will be disbursed over three tranches. The first tranche will be extended immediately upon approval, whereas the disbursement of the other two tranches will be contingent on the government commitment to the agreed-upon economic reform program. It is also worth mentioning that the loan will have an interest rate of 1.1%. a grave period of 39 months and a payment period of 5 years.

Hany Genena, Head of Research, Pharos Securities Brokerage, commented on this news, stating that from now till negotiations are concluded in November, Egypt’s constitution and parliament as well as foreign policy stance will be scrutinized by the IMF main funders, particularly the US. Any sign of friction between Egypt and neighboring countries should be taken seriously as a sign of a possible failure of IMF negotiations.

Mubasher