Egypt may sign a five-year loan deal with the International Monetary Fund (IMF) during the IMF and World Bank biannual meetings in mid April, Daily News Egypt reported. Economic analysts and reports speculate the IMF deal is nearer after the Central Bank of Egypt (CBE) devalued the Egyptian pound on March 14th.
However, as Ahram Online wrote, Egypt will delay an international bond issuance until at least the first half of fiscal year 2016/17 and it has not begun talks for an IMF loan, according to the Egyptian Finance Minister, Amr el-Garhy.
Meanwhile, US-based financial services firm JP Morgan anticipated that the Egyptian government will close the IMF loan before the end of the fiscal year. The international rating agency, Fitch, also believes Egypt can obtain the loan.
Since the start of the negotiations, Egypt has introduced economic reforms to trim the growing budget deficit. Most notably, the government cut fuel subsidies in July 2014 and plans further reduction in the 2016-2017 FY.
Reduction in public revenues has prompted the government to increase the price of automotive petroleum products, such as gasoline, diesel, and kerosene in the domestic market, with the aim of trimming the budget deficit by EGP48b, which equivalent to 10% of GDP.
Egypt has been negotiating billions of dollars in aid from various lenders to help revive an economy battered by political upheaval since the 2011 revolt and ease a dollar shortage that has crippled import activity and hampered recovery.