Egypt will request a meeting of the International Monetary Fund’s executive board within days after meeting the requirements for a $12bn loan, the lender’s largest ever in the region.
“We are making very good progress on getting the required $5bn to $6bn” stipulated by the IMF before the board reviews the loan, Egypt’s Deputy Finance Minister Ahmed Kouchouk told reporters at a two-day Euromoney conference that began yesterday in Cairo. “It shouldn’t be a concern.”
A sign-off from the IMF would release the first tranche of a three-year loan signed in August, which officials expect will attract aid and investment to an economy hampered by a foreign currency shortage. Egypt’s international reserves of $16.6bn are still around 50% below their pre-2011 levels when former president Hosni Mubarak was ousted from power, while the pound has been trading on the black market at around a 30% discount to the official rate against the dollar.
Egypt has secured some of the funding required by the IMF from its Gulf allies, who have already pumped billions of dollars into the economy since the 2013 ouster of Islamist President Mohamed Mursi. It also plans to sell between $3bn and $5bn in international bonds.
Ahead of the IMF financing, the government introduced a value-added tax, raised electricity prices and sought other cost savings to shrink one of the Middle East’s highest budget deficits. Economists say inflation, currently almost 16%, may reach 20% by the end of the year with the VAT. The new tax led the World Bank and the African Development Bank to release $1.5bn of previously agreed loans.
Egypt is also in talks with China for $4bn in loans to fund sewage and renewable energy projects, International Cooperation Minister Sahar Nasr told reporters in Cairo.
The Central Bank of Egypt’s headquarters is seen in downtown Cairo yesterday. A sign-off from the IMF would release the first tranche of a three-year loan signed in August, which Egyptian officials expect will attract aid and investment to an economy hampered by a foreign currency shortage.
Mubadala said to weigh options for $2bn buyout portfolio
A Mubadala Development Co employee walks past the company’s logo at their exhibition booth during the Singapore Airshow in Singapore in this photo dated February 20, 2008. Abu Dhabi’s Mubadala is weighing options that may include moving some of its $2bn private equity portfolio to another vehicle as part of the creation of an investment fund, people familiar with the matter said, according to Bloomberg. The sovereign fund is working with advisers at Campbell Lutyens & Co to review alternatives for the portfolio, the people said, asking not to be identified as the information is private. No final decisions have been made, the people said. Mubadala is looking at establishing a new investment fund that will co-invest with other partners on private equity deals, and it’s in discussions with “a number of world-class partners to explore the idea of joining us,’’ Mubadala spokesman Brian Lott said in an e-mailed statement yesterday. He declined to comment further. A representative for Campbell Lutyens didn’t immediately respond to e-mails seeking comment.
EGYPT
