IMF chief urges OK of Egypt’s $12b loan

CAIRO — The head of the International Monetary Fund praised Egypt›s recent austerity measures on Tuesday and called on the world lender›s Executive Board to finalize a $12 billion loan package to help rebuild the economy of the Arab world›s most populous country. Egypt›s long-running financial woes have worsened in recent weeks amid a dispute with Saudi Arabia, which provided billions of dollars in aid after the military ousted an elected Islamist leader in 2013 but cut off fuel shipments last month over a dispute related to the Syrian conflict. IMF chief Christine Lagarde praised Egypt›s decision last week to float its currency and slash fuel subsidies, measures that have hiked the price of basic goods, but which she said would shore up its reserves, attract foreign investment and reduce its budget deficits. “The Egyptian authorities have embarked on an ambitious reform program to put the country›s economy on a sustainable path and achieve job-rich growth,” she said. She said she would recommend that the IMF Executive Board approve Egypt›s request for $12 billion in loans when it meets this Friday. Egypt is struggling to recover from years of turmoil following the 2011 uprising that toppled Hosni Mubarak. Some fear the sharp rise in prices caused by the austerity measures could ignite further unrest, but in the short term they seem to have restored some investor confidence. Egypt›s shares have risen for a fourth successive business day, with the benchmark EGX 30 index closing up 2.48 percent on Tuesday. The Egyptian pound traded at banks on Tuesday at around 17.75 to the dollar, nearly twice the dollar›s official, pre-float exchange rate. The pound was trading at an all-time low of 18.50 to the dollar in the parallel black market prior to the float. — AP