IMF will leave that currency alone, says Egypt's Finance Minister
Egypt is likely to enact an agreement with the International Monetary Fund by the end of 2012 on a $4.8 plus loan deal, Egyptian Finance Minister Momtaz El-Said told Ahram Online in a telephone interview Friday.
“We are in the technical discussion phase with the IMF” El-Said reveals.
IMF’s delegation is checking the financial results of the last fiscal year 2011/12 in addition to Egypt’s governmental expectations for the current and coming fiscal years against the impact of the economic reform programme, El-Said details.
“The economic reform programme will be implemented over two years starting 2012/13,” the minister commented.
Ahram Online had previously learned that the proposed economic programme will include several new taxes, such as value-added tax and additional taxes on cigarettes and mobile phonecalls.
El-Said confirmed that there is no relation at all between the IMF’s current visit and the depreciation the Egyptian pound (EGP) saw last week.
“It is out of our discussion, as the Egyptian currency’s value depends on changes in global exchange rates and I can assure that the EGP is still safe."
The Egyptian pound inched to its weakest level in almost eight years on Wednesday as traders said that the government seemed to be signalling to the IMF it is prepared to be flexible over the value of the currency, which many analysts say is substantially overvalued against the US Dollar.
“It is not about the loan, I reiterate: we need to come to a deal to reassure foreign investors that the Egyptian economy will recover,” he explained.
Even if Egypt increases its direct investments, it will not be enough to spur economic recovery, Momtaz said.
According to Egypt Central Bank’s data the total implemented investments in fiscal year 2011/12 are worth LE236 billion ($38 billion), including LE34.2 billion ($5.5 billion) for governmental investments.
The IMF loan has not proven popular among many Egyptians, who believe the loan further pushes the country into debt and dependence.
On Saturday, the Egyptian Popular Current, led by Nasserist Hamdeen Sabbahi, published a statement calling for Egyptians to send emails to the IMF administration to voice opposition to the current loan package and "conditional loans," in general.
Currency calculations are based on the newly-depreciated value of the Egyptian pound, which is at LE6.1 per $1, down from LE5.5 before the revolution.