By Lesley Wroughton
WASHINGTON Jan 18 The International Monetary
Fund has begun negotiations with Tunisia on a loan program,
while Egypt has expressed readiness to move forward on a crucial
$4.8 billion funding deal, a senior IMF official said on Friday.
Masood Ahmed, IMF director for the Middle East and North
Africa, told reporters he hoped to report progress in the talks
with Tunisia by early February. Tunisia said late last year it
was seeking a $2.5 billion loan from the IMF, although Ahmed
said the talks were currently establishing the funding needs of
Tunisia's newly elected Islamist-led government has sought
to revive the economy in the face of a decline in trade with the
crisis-hit euro zone and political disputes over the future of
the North African Arab state.
Also, Egypt is keen to move forward to finalize its IMF loan
deal and a technical team is currently reviewing whether the
authorities' economic measures are enough to deal with the
country's financial challenges, Ahmed said.
He said the government told the IMF during a visit in early
January that it was ready to move forward.
Egypt won preliminary approval for an IMF loan in November
but political turmoil forced the government to delay unpopular
austerity measures deemed necessary to win final approval from
the IMF board. The economy was hit by more turmoil with tensions
over a new constitution damaging people's confidence in the
Ahmed said the IMF needed to be satisfied that Egypt would
be able to implement the program before it gave a final
Meanwhile, the Egyptian pound has hit a new record low
against the U.S. dollar this week since the authorities
introduced a new system of foreign currency auctions to curb a
decline in foreign reserves.
Ahmed said the IMF supported the authorities' objective to
preserve and strengthen international reserves and to have a
well-functioning market for foreign exchange.
"It is part of that process that they've put in place these
auctions and in a way the prices are reflecting supply and
demand," he added.