A delegation from the International Monetary Fund arrived in Cairo on Monday led by Massoud Ahmed, director of the IMF’s Middle East and Central Asia Department, to discuss granting Egypt a loan of US$3.2 billion.
Abdel Shakour Shalaan, Middle East representative on the IMF board, also arrived with the delegation.
One of the delegation members the news agency DPA that the negotiations will seek to set the best terms for loaning Egypt $3.2 billion, an amount that exceeds Egypt’s IMF quota of $1.9 billion.
An IMF source told Reuters Wednesday that the loan would be about 300 percent of Egypt’s IMF quota, which determines how much a member country can borrow from the lender.
The IMF has raised the borrowing ceiling in countries that are undergoing changes as a result of the “Arab Spring” movements that began in 2011.
Egypt sealed a $3 billion loan deal with the IMF last year, but the loan was later rejected by the ruling military council. This time around, negotiations are taking place under tense political conditions, as the council is expected to hand over power to a civilian government within months.
Analysts believe an agreement with the IMF could stabilize the Egyptian economy and encourage investments in the country.
The IMF has insisted that any deal with Egypt needs to have broad political support, meaning it would be respected by whatever government succeeds the ruling Supreme Council of the Armed Forces. The global lender has successfully negotiated programs with caretaker governments before, most recently in Portugal and Ireland.
Prime Minister Kamal al-Ganzouri on Saturday met with Mohamed Morsy, president of the Freedom and Justice Party (FJP), and his deputy, Saad al-Katatny. A government source speaking on condition of anonymity told Al-Masry Al-Youm that Ganzouri discussed the IMF loan issue with the FJP leaders.