CAIRO – Egypt Wednesday asked for $4.8 billion in aid from the International Monetary Fund (IMF) to help boost the country's economy, the prime minister said. The request was made during a visit by IMF managing director Christine Lagarde to Cairo, during which she met with both President Mohamed Morsi and his prime minister, Hisham Qandil. “The loan in general terms is worth $3.2 billion. We talked about increasing it up to probably $4.8 and maybe more,” Qandil told a joint news conference with Lagarde. He said Egypt was seeking a signing by the end of 2012 of a loan agreement based on an interest rate of 1.1 percent and a five-year repayment period following a 39-month grace period. But Lagarde stressed the two sides had not “gone into details” of either the amount or the terms of the loan program. The loan amount would form “part of a dialogue that we will continue to have.” She told reporters the IMF had been “very impressed” with the strategy and the ambition that Morsi and his prime minister had laid out in their meetings. Lagarde also said in a statement: “The authorities have indicated that Egypt would like the IMF to support Egypt's economic program financially to help the country recover and to lay the foundation for strong growth that benefits all.” Meanwhile, an official at the Central Bank of Egypt told a state-run paper that he predicted the country's foreign reserve would jump by $6.8 billion to $21.2 billion in the coming period, after Qatar delivers on a $1.5 billion deposit. The anonymous official told the state-run newspaper Al-Gomhurriya Tuesday that reserves are expected to soar after Qatar delivers $1.5 billion, the second batch of its previously announced deposit to the CBE. Qatar said Saturday it would deposit $2 billion. Egypt has only received $500 million. Egypt's foreign reserves began a steep decline last year when a popular uprising led the central bank to buy Egyptian pounds to support the currency. Saudi Arabia stepped in with financial support in June, approving $430 million in project aid for Cairo and a $750 million credit line for oil imports. The official added that the increase could also go higher if the IMF agrees to Egypt's request to increase the loan to $4.8 billion. The government decided to lower subsidies on oil products from EGP95.5 billion in the 2011-2012 budget to EGP25.5 billion in the 2012-2013 budget by applying a coupon system on butane, gas and diesel in addition to other procedures for rationalizing energy consumption. The source told the paper that interest rates for the Egyptian pound will either be cut or fixed following a meeting by the central bank's committee for monetary policies in mid-September. – Agencies
