Egypt in renewed talks with IMF for $4.8 billion loan

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Associated Press

Posted on January 12, 2013 at 2:34 AM

CAIRO (AP) — Egypt has renewed negotiations with the International Monetary Fund for a huge loan to prop up its collapsing economy.

The $4.8 billion loan would only partially cover Egypt's spiraling budget deficit, but it would signal investors that Egypt is a safe place to put their money again.

Egypt's economy has been in a tailspin since a popular uprising ousted President Hosni Mubarak nearly two years ago. Foreign investment has all but disappeared and tourism has dried up, as foreigners are concerned about internal turmoil.

The central bank says foreign currency reserves are down to a critical minimum — enough for only three months of vital imports. The bank was forced to float the currency, which has lost more than five percent of its value in two weeks.

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