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IMF aid comes with bitter pill for Egypt

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IMF aid comes with bitter pill for Egypt
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With the Egyptian pound hitting new lows against the dollar and a currency crisis threatening the new government the IMF is in Cairo to try and grant Egypt a near-five-billion-dollar loan.

Foreign currency reserves are dwindling fast but the IMF is insisting it stands behind Egypt, even if it is demanding austerity measures in exchange for the cash.

However with parliamentary elections approaching it seems President Mohammed Morsi is unwilling to increase taxes and push through economic reforms in line with the IMF’s demands.

The government says it wants time to explain austerity to the people, but since agreeing to the IMF rescue package in November several reforms and tax rises have been postponed, and there is doubt the political will exists to take any risks that could hurt the Muslim Brotherhood at the polls.

Egypt’s currency has lost a tenth of its value since the fall of Hosni Mubarack in 2011.