- Prison Planet.com - http://www.prisonplanet.com -

Egypt May Be Forced to Seek $3 Billion IMF Loan It Rejected: Arab Credit

Posted By admin On October 10, 2011 @ 7:33 am In Tile,World News | Comments Disabled

Alaa Shahine
Bloomberg [1]
October 10, 2011

Egypt, grappling with sectarian violence, labor strikes and the highest borrowing costs since 2008, may be forced to ask the International Monetary Fund for the $3 billion loan it spurned in June.

The yield on the government’s one-year treasury bills soared 328 basis points, or 3.28 percentage points, to 13.86 percent since the Jan. 25 revolt that ousted President Hosni Mubarak, the highest since November 2008. The extra yield investors demand to hold Egyptian debt instead of U.S. Treasuries rose 160 basis points for the period to 421, according to JPMorgan Chase & Co.’s data. Middle East spreads climbed 128 basis points on average to 437, the data show.

“They must go to the IMF and the World Bank,” Mona Mansour, co-director of research at Cairo-based investment bank CI Capital, said in a telephone interview. “The government will resort to foreign borrowing because this can’t continue.”

Returning to the IMF risks a backlash from the activists who led this year’s revolt and objected to loans from the fund and the World Bank on the grounds that they endorsed Mubarak’s policies, said Raza Agha, an economist at Royal Bank of Scotland. Egypt is in talks with Saudi Arabia and the United Arab Emirates for $5 billion in loans to finance the budget deficit, which the government aims to reduce to 8.6 percent of economic output in the fiscal year through June 2012. The gap was 9.5 percent in the previous 12 months.

Full article here [1]

Article printed from Prison Planet.com: http://www.prisonplanet.com

URL to article: http://www.prisonplanet.com/egypt-may-be-forced-to-seek-3-billion-imf-loan-it-rejected-arab-credit.html

URLs in this post:

[1] Bloomberg: http://www.bloomberg.com/news/2011-10-09/egypt-may-be-forced-to-seek-imf-loan-it-rejected-arab-credit.html

[2] The US Government Will Make A Record $51 Billion Off Student Loan Debt This Year: http://www.prisonplanet.com/the-us-government-will-make-a-record-51-billion-off-student-loan-debt-this-year.html

[3] FDIC Hits Record “Default” Level As Deposit Insurance Fund Plunges By $12.7 Billion To NEGATIVE 20.9 Billion: http://www.prisonplanet.com/fdic-hits-record-default-level-as-deposit-insurance-fund-plunges-by-12-7-billion-to-negative-20-9-billion.html

[4] Lloyds TSB to Buy HBOS for $22 Billion as Credit Crisis Widens: http://www.prisonplanet.com/lloyds-tsb-to-buy-hbos-for-22-billion-as-credit-crisis-widens.html

[5] As Loan Rates Fall, Borrowers Seek ‘Taste of the Bailout Pie’: http://www.prisonplanet.com/as-loan-rates-fall-borrowers-seek-taste-of-the-bailout-pie.html

[6] What Happens to Citibank’s $8 Billion Loan to Dubai?: http://www.prisonplanet.com/what-happens-to-citibanks-8-billion-loan-to-dubai.html

Copyright © 2013 PrisonPlanet.com. All rights reserved.