6 Jun 2011

$US3b loan for Egypt

7:04 am on 6 June 2011

The International Monetary Fund has agreed a $US3 billion loan deal with the interim government in Egypt.

The IMF praised the government's attempts to stabilise the economy since the uprising that toppled President Hosni Mubarak in February.

The uprising scared away tourists and investors and cut tax revenues, leaving the government short of cash.

The BBC reports that the deal must still be approved by the IMF board and Egypt's cabinet and military council.

Egypt has a grace period of three years and three months followed by five years to repay the loan.

Last week, the government approved a budget for 2011/12, which raised spending by a quarter.

Much of the increased spending went on helping low-income households.

The growing gap between rich and poor was one of the factors that sparked the protests in February.