Egypt seeks to push forward key IMF deal

Egypt is pushing to tie up a crucial financial package from the International Monetary Fund at annual meetings in Washington this week, hoping to stem a currency crisis that has restricted imports and sparked market unease over foreign debt repayments.

Egypt began talks with the IMF for a financial support package in March, soon after the Ukrainian crisis threw its already unsettled finances into further disarray and led foreign investors to pull nearly $20 billion out of Egyptian treasury markets in a matter of weeks.

The foreign exchange shortage has led to a sharp drop in non-oil imports, which fell by 20 per cent in the April-June quarter, according to central bank data. This has led to a shortage of input for both factories and retailers, and a backlog of goods and commodities including wheat at ports. Banks have tightened limits on dollar withdrawals from Egyptian pound accounts.

“The conclusion of negotiations with the IMF are becoming increasingly urgent amid growing foreign exchange scarcity, supply shortages and persistent inflation,” said Callee Davis of Oxford Economics.