Egypt Expects Arab Allies to Provide Aid as Part of IMF Deal

CAIRO, Egypt, Capital Markets in Africa: Egypt expects its oil-rich allies such as Saudi Arabia and the United Arab Emirates to provide funding as the country moves to finalize a $12 billion loan program with the International Monetary Fund, Prime Minister Sherif Ismail said.

International financial institutions will also help finance the government’s three-year program with the Washington-based lender, Ismail told Bloomberg News in Cairo on Wednesday. The IMF’s Executive Board will not consider the loan deal before Egypt secures commitments of as much as $6 billion from bilateral creditors, Chris Jarvis, the fund’s mission chief for Egypt, said on August 14. He said the fund would help the government secure the money.

Egypt is targeting $21 billion over three years to restore investor confidence and ease a crippling foreign-exchange shortage. Net international reserves dropped to $15.5 billion in July, the lowest level in 16 months.

In addition to the IMF loan, funds will come from the World Bank, the bond market and bilateral accords, officials have said.

Source: Bloomberg Business News