Egypt: IMF aide to discuss $4.8 billion loan request
An Egyptian woman sells clothes on the side of a road in Cairo. Some 40 percent of Egyptians live on less than $2 per day, the World Bank says.
CAIRO, Egypt — Egyptian leaders met with a senior official from the International Monetary Fund to resume talks about a $4.8 billion loan agreement that was postponed last month.
Reuters reported that the IMF's Middle East and Central Asia director, Masood Ahmed, was visiting Cairo to discuss "possible IMF support for Egypt," according to a statement released on Saturday in Washington.
GlobalPost's Senior Correspondent in Egypt Erin Cunningham said the IMF visit to Cairo comes at a crucial time for the country's embattled president, Mohamed Morsi.
"The recent political turmoil over the constitution has only exacerbated the country’s economic crisis, sparking a loss of confidence in Morsi’s government. It was also accompanied by a sharp decline in the Egyptian pound in the last week (it is trading at record lows against the dollar)," Cunningham said.
"Morsi and his government – which have so far failed to articulate a sound plan to hoist the country out of its economic downturn that has seen its foreign reserves tumble and unemployment skyrocket — will need to reassure both IMF officials and the Egyptian population that they are capable of navigating the crisis. Otherwise, they run the risk of alienating either key international donors or voters — or both."
The Egyptian government announced a cabinet reshuffle ahead of the IMF visit, according to CNBC. Al-Mursi Al-Sayed Hegazy was appointed as a finance minister and said he was "completely read to complete discussions" with the IMF.
The IMF's Ahmed will be meeting with President Mohamed Morsi, Prime Minister Hisham Kandil, some ministers and the Egyptian central bank governor, according to state-run newspaper Akhbar Al-Youm, Reuters reported.
Egypt is facing a rising budget deficit, falling foreign exchange reserves and a sliding currency, noted Agence France Presse.
Morsi said last month that the government must "accelerate efforts to revive the economy and growth, attract investment, strengthen exports, promote tourism, create new jobs and improve public services."
AFP said that while the IMF package is expected to allow other international funding and support, it is also expected to come with austerity measures.
More on GlobalPost: Egypt begins auctioning foreign currency
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