The International Monetary Fund has granted Egypt a loan of three billion dollars over 12 months to help put its economy back on track, Finance Minister Samir Radwan announced on Sunday. "Egypt announces the end of negotiations with the IMF and the clinching of an agreement with the fund to relaunch the Egyptian economy," Radwan told reporters.
The two parties agreed to a "three-billion-dollar loan over 12 months... with an interest rate of 1.5 percent," he said, adding that the loan would help partly offset a budget deficit of $28 billion.
The loan grants Egypt a grace period of three years and three months followed by five years to pay it back.
"We are committed to support Egypt and we are conscious of the pressures on state resources, particularly with regards to money transfers from overseas workers and tourism," said Ratna Sahay, deputy director of the fund's Middle East and Central Asia department.
The Egyptian economy, which depends in large part on tourism, has seen a dramatic drop in tourist arrivals and near zero economic growth during and after the revolt that ousted former president Hosni Mubarak in February.
Tens of thousands of Egyptian workers in Libya, who used to send money back to their families in Egypt, also had to flee the conflict in the neighbouring north African nation.
The IMF said on May 12 it had received a loan request from Egypt.
Egypt, which estimates it needs between 10 and 12 billion dollars in international funding to keep it going until mid-2012, was courting loans worth roughly $6 billion from the IMF and the World Bank.