IMF chief in Egypt to discuss the country’s economy

Cairo, 22 Aug – (ANA) The head of the International Monetary Fund is in Egypt to discuss an urgently-needed financial aid package for the country's struggling economy. Christine Lagarde will meet President Mohammed Mursi and his new cabinet. Finance Minister Mumtaz al-Said has said Egypt will be looking for a loan of $ 4.8bn (£ 3bn), up from the $ 3.2bn that had been mooted since last year. It is needed to cover budget deficits resulting from shrinking tourism and foreign investment revenues. Egypt's foreign reserves have fallen to well under half the levels seen before last year's popular uprising against former President Hosni Mubarak, when the central bank started to sell dollars to prop up the Egyptian pound. The government is facing a balance of payments crisis and high borrowing costs, with local banks shouldering almost all short-term lending to the state, and experts say financial aid is urgently needed to avoid currency devaluation. Egypt's budget deficit for the 2012-3 fiscal year is predicted to be 7.9% of gross domestic product (GDP), while it has internal debt of $193bn and foreign debt of $33.8bn. (ANA)

FA/ANA/22 August 2012---------