(Adds background and quotes)
CAIRO Oct 18 Egypt has mustered 60 percent of
the $6 billion required to secure a $12 billion International
Monetary Fund (IMF) loan, Prime Minister Sherif Ismail said on
The IMF in August agreed in principle to grant Egypt the
three-year loan facility to back a government reform programme
aimed at plugging a budget gap and rebalancing currency markets.
Egypt needs to secure $6 billion in bilateral support before the
deal goes to the IMF board for approval.
"There is a problem with the growth rates, the public debt
and the budget deficit...and the resources of the state budget
is 930 billion, 292 billion are debt servicing," " Ismail told
reporters following a cabinet meeting.
"The wages rose from 85 billion to 230 billion and what is
left from the budget is for health services, education, and
infrastructure...without resources, there would be no projects
or new job opportunities for citizens," Ismail added.
Egypt's economy has been struggling since an uprising in
2011 ushered in political instability that drove away tourists
and foreign investors, major sources of foreign currency.
Ismail also said that his government is working on making
the rate of the dollar against the pound more reflective of its
Black market traders said on Tuesday they are selling
dollars at 15.5 pounds on Tuesday, up from 15 a week earlier,
while the official rate is 8.8 pounds per dollar. The widening
gap is increasing pressure on Egypt to devalue its currency and
end uncertainty that has discouraged foreign investment.
As part of a reform program that formed the basis of the IMF
agreement, Egypt approved a long-awaited value-added-tax of 13
percent. Previously Egypt had no value-added-tax. The IMF also
wants Egypt to focus monetary policy on easing the dollar
shortage and reduce inflation to single digits.
Egypt's efforts to defend the pound have drained reserves
from $36 billion before the 2011 uprising to $19.6 billion at
the end of September.
(Writing by Amina Ismail, editing by Mark Heinrich and Angus