WASHINGTON: Egyptian authorities and the International Monetary Fund will begin talks in Cairo this week on a possible 18-month IMF loan program worth about $3 billion, an IMF source said on Tuesday.
The IMF said on Jan. 3 talks with Egypt were planned for January and it was still discussing the timing of a mission.
The source said Egyptian Prime Minister Kamal El-Ganzoury had requested the visit. IMF Director for the Middle East and North Africa, Masood Ahmed, will lead the initial discussions this week, the source added.
Economists have warned that Egypt is headed for a currency crisis if it does not swiftly stabilize an economy hard hit by political protests, which had led to an exodus of investors and tourists and a growing budget deficit.
The country turned down a $3 billion IMF loan agreement in June last year saying it did not need the funds. Ruling military generals have been reluctant to take on debt without a popular mandate.
A new IMF loan could be made available under the IMF’s recently launched Rapid Financing Instrument, designed to provide financing to countries with urgent balance of payments needs.
IMF Managing Director Christine Lagarde said in December the IMF has $35 billion available to lend to countries in the Middle East and North Africa that request financing.