Lagarde visits Egypt to discuss IMF loans

Christine Lagarde

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Head of the International Monetary Fund (IMF) Christine Lagarde visits Cairo to hold talks on the possibility of an IMF loan for the new government of Egypt's Islamist President Mohamed Morsi.

"The IMF stands ready to support Egypt and work closely with the authorities," said a spokesman for the IMF. 

Initially, estimates were that a loan of $3.2 billion would help the country to stave off a budget and balance crisis and add credibility to economic reforms, which the country needs in order to recover the trust of investors who left Egypt after the overthrow of Hosni Mubarak last year. 

On August 15, however, Egypt's Finance Minister Mumtaz al-Saeed told reporters the country would apply for a much higher loan of $4.8 billion. 

Morsi's cabinet will have to decide whether to implement new austerity measures to secure foreign financial aid and help stabilize the government.