CAIRO, April 3 (Reuters) – An International Monetary Fund
(IMF) team resumed long delayed negotiations with Egypt on
Wednesday on a $4.8 billion loan to ease a deepening economic
crisis in the most populous Arab country.
After two years of political upheaval, foreign currency
reserves have fallen to critically low levels, limiting Egypt’s
ability to buy wheat, of which it is the world’s biggest
importer, and fuel.
President Mohamed Mursi’s government signed a preliminary
deal with the IMF in November but postponed ratification in
December due to unrest ignited by a political row over the
extent of Mursi’s powers.
The IMF mission began by meeting finance ministry and the
central bank officials and is expected to stay “a week or 10
days or more”, government spokesman Alaa El Hadidi told
reporters. Prime Minister Hisham Kandil will meet the team when
it has completed its work, he said.
Cairo must convince the global lender it is serious about
reforms aimed at boosting growth and curbing an unaffordable
budget deficit. That implies tax hikes and politically risky
cuts in state subsidies for fuel and food including bread.