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 ...
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
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