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IMF waiting for the “right time” for loan negotiations

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The global lender said all discussions are being held with the technical team from the Central Bank of Egypt and the Ministry of Finance

Christine Lagarde, Chairman and Managing Director of the IMF  (AFP/File Photo)

Christine Lagarde, Managing Director of the IMF
(AFP/File Photo)

The International Monetary Fund (IMF) is waiting for the “right time” to resume negotiations over the much-delayed $4.8bn loan package, said Managing Director Christine Lagarde.

Negotiations over the proposed loan have been further postponed after the military ousted President Mohamed Morsi on July 3.  Typically, an official government has to be recognised by the international community in order for negotiations to take place.

“Obviously, the situation has evolved, has been very unsettled, and everybody is watching the situation,” Lagarde said. “We try to be as ready as we can when the time comes for Egypt to re-initiate discussions with us.”

Lagarde said the IMF was in regular contact with the political authorities since last August, but now the organization is keeping in touch with administrators and technical team officials, but not the political authorities.

On 27 July, IMF spokesman William Murray said in a press briefing the fund will remain in touch with the technical team, until the government is recognised by the international community.

“There are technical level contacts with Central Bank and Finance Ministry technicians, but there has been no contact with the current government in Egypt,” Murray said.

Three weeks ago, the IMF announced that any decision to engage with a government would be dependent on its shareholders.

When asked if this remains the case, Murray said there is still no clarity from the shareholders on the situation in Egypt.

Two weeks ago, Moody’s, the credit rating agency which maintained Egypt’s Caa1 rating classifying it as a very high credit risk, said the implementation of an IMF-supported program of fiscal and economic reform would be considered as credit positive.


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