x Abu Dhabi, UAEFriday 28 July 2017

In reversal, Egypt to seek help from IMF

Egyptian government representatives will meet an IMF team to negotiate a loan authorities hope will prevent the country's economy from weakening further.

Egyptian government representatives will meet an IMF team next month to negotiate a loan that authorities hope will prevent the country's economy from weakening further.

Egypt refused a US$3 billion (Dh11.02bn) IMF facility in June but has signalled a willingness to renegotiate amid dwindling reserves and a depreciation of the country's currency.

"The IMF team is looking forward to discussions in January with the authorities on their economic programme to address Egypt's difficult economic and financial situation," an IMF representative said in a statement to Reuters. The IMF said it was too early to discuss specific measures.

Economists say Egypt may need as much as $15bn to stave off a full-blown financial crisis.

The original sum is "not enough, because when the $3bn was negotiated in June, the situation was very different," said Said Hirsh, an economist with Capital Economics.

Foreign direct investment was down 93 per cent to $376 million in the first nine months of this year amid the turmoil that followed the ousting of Hosni Mubarak from the presidency in February. Egypt's foreign currency reserves tumbled 44 per cent to $22bn in the first 10 months.

"We do not see any catalyst for improvement in the country's economy, unless these overhangs are resolved," said Wafik Dawood, the head of institutional sales at Mega Investments Securities in Cairo.

halsayegh@thenational.ae

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