Christine Lagarde, managing director of the International Monetary Fund, arrived in Cairo Tuesday for a two-day visit to hold talks with officials over a long-anticipated loan.
President Mohamed Morsy is scheduled to meet with Lagarde on Wednesday to review the country's economic and social reform program, as well as a loan to support the central bank’s cash reserves, according to a presidential spokesperson.
An IMF delegation is scheduled to arrive by the end of this month to complete negotiations.
State-run MENA news agency said that Lagarde is also meeting with Prime Minister Hesham Qandil to discuss the anticipated US$3.2 billion loan at an interest rate of 1.1 percent over three installments.
However, Finance Minister Momtaz al-Saeed said on Monday that Qandil would begin talks with Lagarde to increase that loan to $4.8 billion loan. The negotiations with Lagarde would be broad, he said, to be followed by more detailed talks following the arrival of an IMF technical team that will examine the specifics of the loan.
The economic and social program that the government earlier showed to the IMF will have slight amendments related to lowering subsidies on energy and oil products and restructuring taxation, Saeed told Al-Masry Al-Youm.
The government decided to lower oil subsidies from LE95.5 billion in the fiscal year 2011/2012 budget to LE25.5 billion in this year's budget by applying a coupon system for butane, gas and diesel products in addition to other procedures for rationalizing energy consumption.
The government also seeks to apply an ascending taxation system by increasing taxes for each income bracket as part of its efforts to fix the existing system.
Edited translation from Al-Masry Al-Youm
