Egypt Seeking to Push Forward Critical IMF Deal in Washington

At this week's annual meetings in Washington, Egypt is attempting to secure a significant financial package from the IMF in an effort to end a currency crisis that has restricted imports and caused market jitters regarding foreign debt repayments.

In March, shortly after the Ukrainian crisis further threw Egypt's already-fragmented finances into disarray and caused foreign investors to withdraw nearly $20 billion from Egyptian treasury markets in a matter of weeks, the country started negotiations with the IMF for a financial support package.

According to central bank data, the lack of foreign currency has caused a sharp decline in non-oil imports, which fell by 20% in the April-June quarter. Due to this, retailers and factories are experiencing a shortage of input, and ports are experiencing a backlog of goods and commodities, including wheat. Banks have tightened limits on dollar withdrawals from Egyptian Pound accounts.

The specifics of an IMF agreement are still unknown, but economists say they would probably include pledges to allow the currency to fluctuate freely against other currencies, to give the private sector more room to participate in the economy, and to aggressively sell off state assets.