IMF’s visit has nothing to do with Egypt’s pound devaluating: official

There is no connection between the International Monetary Fund’s visit to Cairo and the devaluation of Egypt’s pound last week, an official said.

“It is out of our discussion, as the Egyptian currency’s value depends on changes in global exchange rates and I can assure that the EGP is still safe," Ahram Online quoted Egyptian Finance Minister Momtaz El-Said saying on Sunday.

“It is not about the loan, I reiterate: we need to come to a deal to reassure foreign investors that the Egyptian economy will recover,” he added.

Many foreign investors are waiting for the IMF agreement with Egypt as Cairo has asked for a $4.8 billion loan. On Wednesday, the Egyptian pound was bid at 6.1112 to the U.S. dollar, the weakest value since 2004. In the same day, the IMF returned to Cairo to resume discussions on the loan deal, Reuters reported.

While some critics say the deal is a sign of Egypt’s economic weakness, leader of Egypt’s Popular Current party, Nasserist Hamdeen Sabbahi, called for Egyptians to send emails to the IMF administration to protest against the current loan package and its conditions.

Many Egyptians view the government as trying to show the IMF that it is ready to work on making the currency more flexible as many analysts say it is overvalued against the U.S. dollar, according to Ahram Online.

The finance minister, meanwhile, said that Egypt might sign a $4.8 billion plus loan, repeating what some other officials already said that Cairo might seek more.

The IMF’s delegation is currently investigating the country’s financial results of the last fiscal year between 2011 and 2012, he said, adding that Egypt increasing its direct investments however is not enough to push for an economic recovery.

Official results released by Egypt’s Central Bank show that the total investments implemented in the fiscal year 2011 and 2012 account to $38 billion, including $5.5 billion for governmental investments.

IMF is evaluating the country’s governmental prospects for 2012 and 2013’s fiscal years against the impact of the economic reform program planned, he said.

The plan includes several new taxes like the value-added tax, additional taxes on cigarettes and taxes on mobile phone calls.