Egypt Independent

Egypt reaches preliminary deal for US$4.8 billion IMF loan

Egypt has reached a preliminary agreement with a team from the International Monetary Fund for a US$4.8 billion loan, a minister said on Tuesday.

"We have a preliminary agreement with the technical team of the IMF," Planning and International Cooperation Ashraf al-Araby told a news conference with the head of the IMF delegation, Reuters reported.

According to AFP, the staff-level agreement is expected to be submitted to the IMF's executive board for approval in a few weeks, a statement said.

"The Egyptian authorities have developed a national program that seeks to promote economic recovery, address the country's fiscal and balance of payments deficits, and lay the foundation for rapid job creation and socially balanced growth in the medium term," said IMF official Andreas Bauer, who led the Washington-based lender's mission to Cairo.

"The policies contained in the authorities' program will help address Egypt's pressing economic and social challenges, and reduce vulnerabilities," he added.

Reuters reported that the Araby added that the preliminary agreement would go to the IMF board to be finalized in December. An IMF official said the loan would be disbursed over 22 months.

The so-called Stand-By Arrangement will support the government's economic program through the 2013/14 fiscal year and support an economy left battered by the 2011 uprising that toppled Hosni Mubarak's regime.

Political instability has hammered the tourism industry in Egypt, the country's major source of revenue, and has led to a drop in foreign investments, worsened the budget deficit and sparked social conflict.

The Egyptian central bank's currency reserves plunged, threatening the country's ability to import commodities and support the Egyptian pound.