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Posted on: March 12th, 2013 by AlYunaniya Staff No Comments

Egypt considering IMF emergency loan offer as Qatar stops aid

Egypt Mursi

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Egypt has the option of requesting short-term funding from the International Monetary Fund before reaching a broader loan agreement, an IMF spokeswoman said.

However, Egypt on Sunday rejected any suggestion of applying for an emergency IMF funding to help it as it struggles an economic and currency crisis.

The funding, known as the IMF’s Rapid Financing Instrument, would is short-term and would not replace Egypt’s negotiations with the IMF on a $4.8 billion loan, the source said, according to Reuters.

The RFI provides rapid and low-access financial assistance to member countries facing an urgent balance of payments need, without the need for a full-fledged program. It can provide support to meet a broad range of urgent needs, including those arising from commodity price shocks, natural disasters, post-conflict situations and emergencies resulting from fragility, according to the institution.

The RFI was created as part of a broader reform to make the IMF’s financial support more flexible to address the diverse needs of member countries.

“Egypt needs bold and ambitious policy actions to address its economic and financial challenges without further delay,” IMF spokeswoman Wafa Amr said on Monday.

Egypt’s foreign reserves have fallen to critically low levels and a $4.8 billion loan from the International Monetary Fund was delayed by the political unrest that has gripped the country.

Meanwhile, Qatar does not expect to give further financial aid to Egypt in the immediate term, Qatari Finance Minister Youssef Kamal told Reuters on Monday.

Qatar has been a key source of foreign aid to Egypt since its 2011 revolution.

“We already announced $5bn,” Kamal told the news service, when asked how much aid Qatar had provided Egypt to date.

A few weeks earlier, Secretary of State John Kerry on Sunday rewarded Egypt for President Mohammed Morsi’s pledges of political and economic reforms by releasing $250 million in American aid to support the country.

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