Egypt asks IMF for R4.8bn loan

Egypt's President Mohamed Morsi. (AFP)

Egypt's President Mohamed Morsi. (AFP)

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 US $3.2-billion. We talked about increasing it up to probably 4.8 and maybe more," Qandil told a joint news conference with Lagarde on Wednesday.

He said Egypt was seeking a signing by the end of 2012 of a loan agreement based on an interest rate of 1.1% 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 programme. 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 programme financially to help the country recover and to lay the foundation for strong growth that benefits all."

The visit comes as Morsi, the country's first Islamist president, moves to consolidate power in the wake of his election in June and after more than a year of instability in Egypt prevented the IMF from proceeding with loan talks.

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