Egypt negotiations with IMF making 'good' progress

Thursday 04-08-2016 06:31 PM

Finance minister Amr al-garhim- Photo from the ministry

By Reuters

By Ehab Farouk

CAIRO, Aug 4 (Reuters) - Egypt is making "good" progress in negotiations with the International Monetary Fund, Finance Minister Amr El-Garhy said on Thursday, and expects parliament to pass a long-awaited value-added tax law by early September.

Egypt is negotiating a $12 billion loan with the IMF and is pushing ahead with reforms, including plans for a VAT tax and further subsidy cuts that were put on hold when global oil prices dropped.

"We are making good progress in negotiations with the IMF," El Garhy said at a news conference on Thursday. The talks with the IMF delegation, which are expected to continue until mid-August, relate to the current budget, he said.

"We want to achieve the figures we set for the budget ... This is what we are discussing with the IMF," Garhy said.

Egypt's economy has been struggling since a mass uprising in 2011 ushered in political instability that drove away tourists and foreign investors, both major earners of foreign currency. Reserves have halved to about $17.5 billion since then.

Egypt said last month that it also plans to issue eurobonds of up to $3 billion in September or October, but the amount may be raised to $5 billion if market conditions are right, said the finance ministry's deputy for foreign policy, Ahmed Kojak.

"We received cabinet approval to issue bonds between $3-5 billion ... If we found appropriate liquidity in international markets and the conditions allow it, why not get $5 billion," Kojak said.

Egypt said on July 28 it was seeking bids from international institutions to arrange its eurobond.

"The door for receiving bids from banks and global institutions to arrange the bond issuance will remain open until the end of next week," Kojak said. (Reporting by Ehab Farouk; Writing by Asma Alsharif)

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