IMF extends $3 billion loan to Egypt
Cairo, Egypt (AHN) – Egypt will receive a $3 billion loan from the International Monetary Fund to assist the Middle Eastern nation with its widening budget deficit that reached $10 billion for the fiscal year that started in July 2010.
Cairo became cash straped following the popular revolt that resulted in the ouster of former President Hosni Mubarak. Although the political upheaval helped bring back democracy to the country, the weeks-long revolt which started the political unrest contagion in the region, it scared tourists and investors.
However, the financing deal announced by IMF Middle East Department Deputy Director Ratna Sahay, needs the approval of the IMF board and Egypt’s cabinet and military council. If approved, the one-year loan would carry a 1.5 percent interest rate.
The announcement of the IMF loan was preceded by Cairo’s approval last week of the 2011-2012 budget, which hiked spending by 25 percent aimed mainly at assisting low-income Egyptian families. The IMF agreed that the newly passed budget is in the right direction which also supports economic recovery and generates jobs.
The large gap between rich and poor in Egypt triggered the popular revolt that started in February.
Eygptian authorities forecast a 2.5 percent growth rate this year, which is less than half of previous forecast.
Aside from the IMF loan, Saudi Arabia extended its Middle Eastern neighbor $4 billion grants and loans, while the World Bank pledged $4.5 billion grants, loans and loan guarantees spread over two years.
The U.S. government promised to swap $1 billion of Egyptian debt for development projects and offered another $1 billion loan guarantees.
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Personal Loans News | admin | June 9, 2011
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The May Mortgage Report just announced that there’s a tremendous number of new foreclosures in the pipeline, building up way faster than they’re being cleared by foreclosure sales. Is there any way this won’t increase the risk of the home loan market falling off a cliff?