Egypt may take bridging loan from IMF

Monday 11 March 2013 16.52
Egypt has been in talks with the IMF about a $4.8bn loan
Egypt has been in talks with the IMF about a $4.8bn loan

Egypt is studying an offer of a bridging loan from the International Monetary Fund, a source at the finance ministry has told Reuters, as it struggles through an economic and currency crisis.

The funding, known as the IMF's Rapid Financing Instrument, is temporary and would not substitute Egypt's negotiations with the IMF on a $4.8 billion loan, the source said.

Asked whether Egypt has received an offer from the IMF for use of the RFI, the source said: "Yes. We are studying the possibility of a temporary loan but no decision has been made yet".

He said the loan would not substitute Egypt's economic reform programme.

"Egypt continues to work towards restructuring its economy through the economic reform programme" he said.

Egypt faces a deep economic crisis stemming from two years of unrest and political turmoil since Hosni Mubarak was removed from power in February 2011, and its foreign currency reserves have fallen to little more than a third of their levels before the revolution.

The IMF today urged Egypt to take bold and ambitious policy actions to address its economic problems without further delay, adding the Arab world most populous country could tap temporary IMF funding while it negotiates a full loan program.

"Use of the RFI could be an option if there is a need for interim financing while a strong medium-term policy program is being put in place," IMF spokeswoman Wafa Amr said. "Ultimately, this is a decision the authorities will have to take.