Dr Hisham Kandel Talks with International Monetary Fund

Dr Hisham Kandel Held session of talks with Ms. Christine Lagarde leader of the International Monetary Fund and her entourage, these talks were attended by governor of central bank, minister of finance, and the representative of the Arab Group at the International Monetary Fund and members of his entourage. The talks tackled Egyptian economic reform program, government plans to activate the economy in the coming period, continuity of the negotiations concerning the loan from IMF to support the cash reserve in the central bank under which Egypt obtains a loan worth $ 4.8 billion. Dr Kandel mentioned that IMF mission visit to Egypt - after the existence of an elected president and responsible government – gives positive message to all international financial institutions especially that Egypt started to witness economic recovery and political stability.

Prime Minister also said that the loan duration will be 5 years with a grace period of up to 39 months and an interest rate of 1.1% also there is a road map with IMF that will end in November and December 2012 and the loan will be signed, he also assured that Egypt resort to foreign debt to face the budget deficit, support small and medium enterprises. Dr Kandel explained that the main reason of this loan is budget deficit, supporting investment and poor people, he assured that internal borrowing is not the best choice in this period, as interest of internal borrowing reaches 12%, while external borrowing interest reaches only 1.1%, hence we find that external borrowing is much better than domestic borrowing, especially as external debt is only 12% which is very safe, also the economic program is 100% Egyptian, the Egyptian government controls all aspects of exchange concerning the loan without any foreign interference, and the acceptance of IMF provides international certificate in dealing with international financial institutions.

The Egyptian government is determined to continue in the economic reform program, and will try to improve economic conditions through rationalization of expenditures and increasing revenues. Ms. Christine Lagarde head of the International Monetary Fund assured her support for Egyptian government efforts to achieve economic development, as IMF is a development partner to Egypt, she also said that IMF appreciates the general strategy followed by Egyptian president and prime minister since the procedures of Egyptian government creates economic environment that gives confidence to international institutions, especially that the Egyptian program gives priority to small medium- sized enterprises and supporting investment, Also the loan with IMF is divided into several steps seeking to achieve economic and political stability in Egypt.

Ms. Lagarde explained that the negotiations on the loan is not over yet, as part of the delegation will stay in Egypt to continue negotiations with Egyptian government then this delegation will travel to Washington to represent the perception of the Egyptian side concerning the economic program, To be presented to the Board of Directors of the International Monetary Fund for final approval. Ms. Lagarde said that IMF is an international institution that seeks to solve all problems of balance of payment and budget deficit, also the political events in Egypt after the revolution is an internal affairs, and IMF includes 187 country , each country has its own opinion and the fund decision is one resolution.