We rejected an IMF request to devalue the pound by 20%, says official

A senior government official said Monday that the government rejected a request by the International Monetary Fund to devalue the pound by 20 percent to stand at its real value, as the Central Bank continues to support the local currency by pumping liquidity from foreign reserves.

The official, who spoke to Al-Masry Al-Youm on condition of anonymity, explained that the IMF request would push the dollar up from its current rate of LE6.3 to LE7.5. 

The official explained that submission to this request could lead to a wave of buying dollars in Egypt, which may push the dollar to a rate of LE10.

He still stressed the need for the US$3.2 billion loan from the fund to offset the budget deficit, in addition to a loan of US$1 billion from the World Bank, and yet another loan of $500 million from the African Development Bank.

The official said that the Muslim Brotherhood obstructs borrowing from international financial institutions, although it is aware of the urgent need for funds after the economy lost more than $20 billion from the foreign reserves.

Meanwhile, Minister of Planning and International Cooperation Fayza Abouelnaga said an IMF mission is arriving in Cairo on Tuesday for a third round of negotiations over the loan.

The International Monetary Fund said on Thursday an IMF team had fruitful talks with authorities in Egypt last week that could lead to an IMF loan. IMF spokesperson David Hawley rejected on Thursday some media reports that the IMF mission and Egypt had failed to agree on a program.

Egypt's economy has suffered dramatically after a popular uprising a year ago toppled President Hosni Mubarak. Egypt had spurned an IMF loan last year but has since changed its mind amid a stalling economy.

The Muslim Brotherhood, the country's largest political force, on Tuesday held off from backing a request for an IMF loan, urging more government transparency.

Translated from Al-Masry Al-Youm

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