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Egypt May Be Forced to Take IMF Loan Earlier Rejected
Posted By kurtnimmo On October 11, 2011 @ 10:46 am In Global Crisis,Tile | Comments Disabled
October 11, 2011
Egypt, grappling with sectarian violence, labor strikes and the highest borrowing costs since 2008, may be forced to ask the International Monetary Fund for the $3 billion loan it spurned in June.
The yield on the government’s one-year treasury bills soared 328 basis points, or 3.28 percentage points, to 13.86 percent since the Jan. 25 revolt that ousted President Hosni Mubarak, the highest since November 2008. The extra yield investors demand to hold Egyptian debt instead of U.S. Treasuries rose 160 basis points for the period to 421, according to JPMorgan Chase & Co.’s data. Middle East spreads climbed 128 basis points on average to 437, the data show.
“They must go to the IMF and the World Bank,” Mona Mansour, co-director of research at Cairo-based investment bank CI Capital, said in a telephone interview. “The government will resort to foreign borrowing because this can’t continue.”
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