US secretary of state meets with Morsi, agrees to pay first $190 of pledged $450m after Egypt agrees to implement IMF reforms.
By REUTERSKerry and Morsi 370(photo credit: REUTERS)
CAIRO - The United States will release $190 million in budget aid to Egypt following an assurance from President Mohamed Morsi that he plans to "complete the IMF process", US Secretary of State John Kerry said on Sunday.Cairo says it wants to reopen talks with the IMF on a $4.8 billion loan which was agreed in principle last November but suspended at Cairo's request following street unrest."In light of Egypt's extreme needs and President Morsi's assurance that he plans to complete the IMF process, today I advised him the United States will now provide the first $190 million of our pledged $450 million in budget support funds," Kerry said in a statement after meeting Morsi.Kerry described the funds as "a good-faith effort to spur reform and help the Egyptian people at this difficult time".Political turmoil in Egypt since a popular uprising overthrew President Hosni Mubarak two years ago has frightened away foreign investors and tourists, a major source of the foreign currency it needs to pay for wheat and fuel imports.Cairo is struggling with a swelling budget deficit and sliding foreign currency reserves.The $190 million is part of $1 billion pledged by US President Barack Obama in 2011 after Mubarak fell in a popular uprising.Washington would also release $60 million for an enterprise fund, Kerry said. It was not immediately clear if that figure was also included in the $1 billion pledged by Obama.Egypt's finance minister said on Sunday he expects an agreement will be sealed before parliamentary elections begin next month.
