The first USD 2.5 bn payment of the USD 12 bn International Monetary Fund facility is arriving in 15 days, an unnamed senior official told Al Masry Al Youm on Thursday, saying we have secured the USD 6 bn in third-party funding we needed. Who was it that saved our skins in the ninth hour? China. Senior government officials and the central bank reached an agreement with the Chinese on a loan last week. As for Saudi Arabia, it had apparently already deposited the USD 2 bn in IMF-required additional funding, the source said. Prime Minister Sherif Ismail had said last Tuesday that we only had 60% of the third-party funding. The first payment expected will be part of the USD 4 bn first tranche. The second and third tranches will be paid out in the next three years if the government continues to meet IMF terms for the loan.

New impetus for two-phase devaluation? The third party funding and the requirement that mobile network operators pay part of their license fees in USD has given new impetus to devaluation, said the source. Prime Minister Sherif Ismail was locked in meetings Tarek Amer last week, with the two having agreed there will be no full float, but a two-stage devaluation starting with a 20% easing after the first funds arrive.

An announcement on the reduction of subsidies is expected to come soon, said the source, who added that the decision to form a committee to set profit margins on basic goods is part of that process.