São Paulo – The International Monetary Fund (IMF) director for the Middle East and Central Asia, Masood Ahmed, is in Egypt to negotiate a loan to the Arab country. He met on Monday (07) with the prime minister of Egypt, Hisham Kandil, and should have other meetings in coming days. According to information disclosed by news agency Reuters, other technicians of the fund should visit the country this week and meet with president Mohamed Morsi.
A US$ 4.8 billion loan was approved with the IMF on November 20th, but was suspended one month later, at the request of Egyptian authorities due to protests by the opposition in the nation. At the time, the protest was triggered after Morsi expanded his presidential powers and called for a plebiscite to vote on a new constitution.
The Egyptian president also suspended a tax hike to avoid new protests. The increase in taxes was one of the austerity measures that Egypt had agreed to take to guarantee the IMF loan.
The loan that is now being negotiated once more makes itself necessary for Egypt to be able to fight the depreciation of the Egyptian pound and to recompose its foreign currency reserves, which have dropped since the start of the protests that resulted in the resignation of former president Hosni Mubarak, on February 11th, 2011, after ruling the country for 30 years.
According to Reuters, the Egyptian pound dropped 4% against the dollar from December 30 to Sunday (06), being traded at 6.45 pounds per dollar. Currency was not traded on Monday due to the Coptic Christmas holiday. Since the beginning of the most recent protests, in December, the Egyptian currency has already dropped 10%. Still according to the news agency, the country’s international reserves fell by US$ 21 million in December, to reach US$ 15.015 billion.
*Translated by Mark Ament
