Egypt Denies Planning Loan Talks with IMF

Egypt Denies Planning Loan Talks with IMF

Egypt has denied recently published reports that it was seeking a loan from the International Monetary Fund (IMF), Egypt’s Central Bank (CBE) Governor, Tarek Amer, told Ahram Online. The reports were citing an anonymous senior government official as saying that Egypt was considering starting loan talks in order to tackle a dollar shortage that was hampering economic growth, Bloomberg wrote.

CBE Head Amer added that Egypt’s foreign-currency crunch was temporary and denied that Cairo would be pondering loan talks with IMF. He stressed that Egypt was capable of “overcoming the current crisis and previous experiences prove that rumors and exaggerations do not have economic foundations,” according to a Bloomberg‘s later report.

Borrowing from the IMF has traditionally been a contentious political issue in Egypt. The nation has held several rounds of negotiations since 2011, reaching two staff-level agreements that were never finalized.

Meanwhile, in the past three months, CBE introduced new measures and policies aiming to strengthen the pound’s value against dollar. Despite the US dollar currently being valued at more than EGP 9, economists nonetheless believe the pound was overvalued due to state regulation, anticipating it will break the EGP 10 threshold in the near future, Daily News Egypt stated.

The Central Bank has already taken several measures over the past few months to curb non-essential imports in an attempt to combat the dollar shortage. In addition, in a recent statement,  CBE Chief Amer said that Egypt would not devalue its currency and risk hiking up inflation and cost of living, which have been on the rise for the past several years, wrote Stratfor.

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