Egypt Says No IMF Agreement Until June

Egyptian Planning Minister Faiza Abu El-Naga said that Egypt expected to sign a $3.2 billion financing package with the International Monetary Fund in June, three months later than it had previously hoped. The political and economic turmoil since President Hosni Mubarak was ousted in February 2011 has dragged the country towards a balance of payments crisis, and in January the government said it wanted to seal an IMF agreement by March. The IMF says that before it agrees to a loan, the government must first sell the plan to the country's political forces, especially the Muslim Brotherhood's Freedom and Justice Party, which won nearly half the seats in the new parliament. It also wants Egypt to line up billions of dollars in additional loans from other international donors.

The FJP says the government has been reluctant to share the details of a reform plan it has drawn up with the IMF, making it hard for parliament to support any accord. Abu El-Naga told reporters on Monday that she expected a memorandum of understanding would be signed within a few weeks and that the agreement would be struck by June. Half of the $3.2 billion loan would be paid out as soon as the agreement is signed. An IMF technical team returned to Cairo last week to continue working out details of an agreement.

Egypt has spent more than $20 billion in foreign reserves since last year's uprising to prop up its currency, limiting its slide to only 3.65 percent against the dollar since January 2011 despite the loss of some of the country's main sources of foreign exchange. The central bank on Monday said reserves fell another $600 million in March to $15.12 billion. This is equivalent to less than three months worth of imports and includes $4 billion in gold bullion the government would be reluctant to draw down, economists say.