Proposed $4.8 billion IMF loan to Egypt put on hold

Proposed $4.8 billion IMF loan to Egypt put on hold

Proposed $4.8 billion IMF loan to Egypt put on hold A vital $4.8 billion International Monetary Fund loan to Egypt will be delayed until next month, as yesterday as rival factions gathered in Cairo and Alexandria for a new round of demonstrations.

Finance Minister Mumtaz al-Said said the delay in the loan agreement was intended to allow time to explain a heavily criticized package of economic austerity measures to the Egyptian people, Reuters reported. The announcement came after President Mohamed Morsi on Dec. 10 backed down on planned tax increases, seen as key for the loan to go ahead. Opposition groups had greeted the tax package, which had included duties on alcoholic drinks, cigarettes and a range of goods and services, with furious criticism.

Egypt ‘requested’ delay

Prime Minister Hisham Kandil said Egypt had requested that the loan be delayed by a month. “The challenges are economic not political and must be dealt with aside from politics,” he told a news conference. In Washington, the IMF said Egypt had asked for the loan to be postponed “in light of the unfolding developments on the ground.” The opposition has called for a major demonstration it hopes will force Mursi to postpone a referendum on a new constitution.

Outside the presidential palace, dozens of protesters succeeded in pushing down two giant concrete blocks forming a small part of a wall blocking access to the site.