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Egypt Denies IMF Wanted It to  Lay Off 1 Million Public Servants
World Economy

Egypt Denies IMF Wanted It to Lay Off 1 Million Public Servants

The International Monetary Fund has not imposed any preconditions on Egypt in order to implement a mooted $12 billion loan package, the country’s finance ministry said late Sunday.
The ministry’s remarks came after media reports suggested that the fund had laid down requirements to provide a loan package to Cairo, including laying off a million public servants, Albawaba reported.
“There is no conditionality on Egypt to obtain the approval of the International Monetary Fund for the government’s reform program in order to provide a loan fund to finance its procedures,” a statement by the ministry said.
The ministry said negotiations with the IMF delegation, which arrived in Egypt Friday, is within the framework of the government reform program and the IMF “will review the procedures (the program) to ensure their effectiveness in achieving its desired goals.”
The government is seeking a package of $4 billion a year over three years, with an interest rate of 1 or 1.5%, according to Finance Minister Amr El-Garhy.
In addition, the package will include $2-3 billion in international bonds, expected to be offered between September and October, according to the minister.
The goals of the government reform program include, the ministry said, curbing a huge budget deficit (ranging between 11 and 13% over the past six years) and growing public debt, stimulating growth and creating more jobs to alleviate unemployment and poverty rates and increase national income.
The IMF has not provided information about the request or possible funding amounts.
El-Garhy said in a television interview on Sunday that Egypt’s external debt would reach $53.4 billion if his country receives an IMF loan.
Last week Egypt said it was seeking $4 billion a year over three years from the IMF to help plug a funding gap. The government hopes to finalize the deal in August.
Egypt’s economy has struggled since the 2011 revolution, which unleashed political turmoil and scared off investors and tourists.
The country’s plummeting foreign reserves forced the central bank to devalue the Egyptian pound by nearly 15% in March. The pound has continued to weaken, falling to an unprecedented 13 EGP to the dollar on the black market earlier this week.

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