Morsi Strengthens Egypt’s Position In Negotiations Over US$ 3.2 Bln IMF loan: Bankers

Under the rule of an elected president, the negotiations over an US$ 3.2 billion loan from the International Monetary Fund are expected to go smoothly, bankers affirmed. The need for foreign borrowing is increasing in the current period amid the absence of available alternatives for providing liquidity over the short term as the results of increasing production, supporting exports and recovery of tourism will appear over the long term.

Mohamed Taha, deputy chairman of Banque Du Caire, said a civilian elected president will strengthen Egypt’s position in the negotiations held between Egypt and IMF over US$ 3.2 billion loan. The deal conditions will either determine the destiny of the loan deal, he added.

He confirmed on the importance of this loan in the current period as it will regain the confidence of international institutions in the country, in addition to guaranteeing the capability of the country’s economy to recover. Besides, the loan will boost Egypt’s dollar cash reserves after the sharp decline of foreign cash reserves in the last period.

Taha recommended that the loan shall be directed to infrastructure and investment projects so as to help in increasing production and supporting local investments.

Abdel Megid Mohy El-Din, deputy chairman of Egyptian Arab Land Bank, affirmed that Egypt’s position in the negotiations over the IMF loan will be better than before under the rule of an elected president especially after Christine Lagrade, head of IMF, had affirmed that the Fund will continue its support to Egypt.

Mohy El-Din also stressed the importance of foreign borrowing in the current period so as to be able to finance the budget deficit and compensate the lost foreign cash reserves