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The Arab Monetary Fund (AMF) said it was arranging a $65 million credit facility for Egypt to help the country trade with other Arab states, as political instability threatens Cairo with a balance of payments crisis. The credit line will be extended through a trade financing programme run by the AMF, central banks and other financial institutions in the region, said the AMF, a multilateral lending body with 22 member countries. Egypt's balance of payments deficit ballooned to $11 billion in the first nine months of its 2011-2012 fiscal year, more than double year-ago levels, as inflows of capital largely dried up.Cairo is seeking aid from a wide range of international donors.
Egyptian officials said in February they had asked for $500 million each from the AMF and the African Development Bank, $1 billion from the World Bank and $660 million from the European Union. But aid has generally been slow to arrive, partly because donors have been cautious about lending while Egypt's political outlook remains unclear.Farouk el-Okdah, Egypt's central bank governor, said at a meeting of AMF and regional central bank officials in Abu Dhabi on Sunday that the capital and revenues of Egyptian commercial banks were strong. "We are in a better position now," he said without giving figures.
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