Egypt to formally seek IMF financing - Minister

CAIRO (Reuters): Egypt will formally ask the International Monetary Fund to start negotiations for a new $3.2 billion financing package after the country turned down such a facility in the summer, the finance minister said on Sunday.

Finance Minister Hazem el-Beblawi had said in remarks published last week that Egypt was now inclined to seek foreign borrowing because of the lower interest rates and longer payment periods offered.

When Egypt turned down the $3.2 billion IMF financing facility in the summer, the then finance minister said it was partly because Egypt’s ruling military did not want to build up debts and said Egypt would rely on local resources.

“We will ask them to come to negotiations and most probably it will be based on the previous one,” Beblawi, who was appointed finance minister in July, told Reuters about the formal request that would be made to the IMF.

Beblawi confirmed that discussions would be over the same amount of $3.2 billion offered previously, but he did not give further details. At the end of October, the minister said no formal request had been made. An IMF team visited Egypt to assess financing needs in October but an IMF official afterwards said the institution had not received an official request for cash.