7 January 2013

Egypt: IMF in Egypt for Loan Negotiations, Technical Team to Arrive Later

Cairo — A senior IMF official met Egypt's government on Monday to discuss a vital $4.8 billion loan as the Islamist-led state battles to contain a currency crisis set off by political turmoil that is depleting its foreign reserves.

IMF Middle East and Central Asia Director Masood Ahmed met Prime Minister Hisham Kandil at the start of a visit coinciding with a sharp decline in the value of the Egyptian pound.

"We will attend many meetings with the Egyptian government today," Ahmed said, adding that "the technical team will come later." He gave no further details.

"At this stage, the putative $4.8 billion IMF deal is the only thing standing between Egypt and a disorderly economic deterioration," HSBC said in a note issued on Monday.

Egypt has endured nearly two years of political upheaval since the euphoria of the uprising that toppled Hosni Mubarak in February 2011 and eventually brought Islamists to power. Their credibility - and how well they do in forthcoming parliamentary polls - may rest on how they handle the economic crisis.

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