IMF set tough conditions on loan to Egypt

Amwal Alghad

A responsible economic source said that IMF mission will return again to Egypt to sign the final agreement of the US$ 2.3 billion loan. IMF conditioned monitoring Egypt’s economy and introducing obligatory solutions for Egypt’s economic problems.
The source assured that the main solution now is maintaining security and economy stable through improving production, tourism, exports, international money transfer and direct foreign investment as they are worsened during the last period.  

International economic analysts warned yesterday that if Egypt’s credit rates continued to fall, this will affect negatively the efforts of the Egyptian government on attracting more foreign funds for the developmental projects.
The economic analysts called on the Egyptian government to implement prompt procedures to raise Egypt’s credit rating and foster trust in Egypt’s ability in repaying liabilities.

Ong Hiu, senior economic analyst at Norman Foundation for economic studies in Washington, said that S&P lowers Egypt’s credit rating by 5 grades from B+ to B due to the reduction of Egypt’s foreign reserves from US$ 36 billion in January 2011 to US$ 3.16 billion by the end of past January, noting that S&P’s negative rating came as a result of the continued sharp falling of foreign reserves and Egypt’s unclear political and economic statuses.

Hiu added that S&P would lower again Egypt’s credit rating, if the Egyptian government could not stop the declining foreign reserves, nor maintain stable monetary and financial statuses, stressing the positive effect of a smooth handover of power on supporting stability, investment and local currency in Egypt.

It is worth mentioning that Moody’s and Fitch lowered Egypt’s credit rating.

Source: Al-Gomhuria