IMF, World Bank ready cash for Egypt

As its political situation has become clearer, Egypt’s long limbo with major international lenders is ending. International Monetary Fund Christine Lagarde is headed to Cairo next week, a sign that the Fund believes conditions are right for a long-discussed loan package. To this point, Muslim Brotherhood skepticism about the IMF and the country’s political turmoil ...

By , a professor at Indiana University’s Hamilton Lugar School of Global and International Studies.

As its political situation has become clearer, Egypt's long limbo with major international lenders is ending. International Monetary Fund Christine Lagarde is headed to Cairo next week, a sign that the Fund believes conditions are right for a long-discussed loan package.

As its political situation has become clearer, Egypt’s long limbo with major international lenders is ending. International Monetary Fund Christine Lagarde is headed to Cairo next week, a sign that the Fund believes conditions are right for a long-discussed loan package.

To this point, Muslim Brotherhood skepticism about the IMF and the country’s political turmoil prevented negotiations from advancing. The size of the loan is not yet clear however; Egypt’s finance minister said this week that Egypt needs significantly more than the roughly $3 billion that has usually been mentioned. As negotiations with the IMF accelerate, the World Bank has already moved; last week, the Bank reportedly approved a $200 million loan to boost job creation.

The Egyptian authorities are hoping that new international funds–and the multilateral seal of approval–will lead to new bilateral lending and private investment. That virtuous cycle needs to start soon. As the Financial Times reports, Egypt’s reserves situation is dire: "Foreign exchange reserves have plummeted over the past 18 months, to a level which is below the three-month imports cover that is regarded as being adequate."  

David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist

More from Foreign Policy

Russian President Vladimir Putin and Chinese President Xi Jinping give a toast during a reception following their talks at the Kremlin in Moscow on March 21.
Russian President Vladimir Putin and Chinese President Xi Jinping give a toast during a reception following their talks at the Kremlin in Moscow on March 21.

Can Russia Get Used to Being China’s Little Brother?

The power dynamic between Beijing and Moscow has switched dramatically.

Xi and Putin shake hands while carrying red folders.
Xi and Putin shake hands while carrying red folders.

Xi and Putin Have the Most Consequential Undeclared Alliance in the World

It’s become more important than Washington’s official alliances today.

Russian President Vladimir Putin greets Kazakh President Kassym-Jomart Tokayev.
Russian President Vladimir Putin greets Kazakh President Kassym-Jomart Tokayev.

It’s a New Great Game. Again.

Across Central Asia, Russia’s brand is tainted by Ukraine, China’s got challenges, and Washington senses another opening.

Kurdish military officers take part in a graduation ceremony in Erbil, the capital of Iraq’s Kurdistan Region, on Jan. 15.
Kurdish military officers take part in a graduation ceremony in Erbil, the capital of Iraq’s Kurdistan Region, on Jan. 15.

Iraqi Kurdistan’s House of Cards Is Collapsing

The region once seemed a bright spot in the disorder unleashed by U.S. regime change. Today, things look bleak.