IMF delegation arrives; spokesman says size of facility is up for discussion: A delegation from the International Monetary Fund arrived in town on Saturday, according to officials at Cairo International Airport. The team landed just 48 hours after a fund official said the size of the package for Egypt would depend entirely on the outcome of the team’s two-week visit, according to Reuters. “The scale of IMF financing will depend on the mission team’s assessment during the visit of the financing needs and the strength of the authority’s reform program,” spokesman William Murray told a regular bi-weekly news briefing. He declined to comment on the Finance Ministry’s target of a three-year, USD 12 bn facility.

A little inside baseball: Murray said Egypt’s quota is about 2.08 bn Special Drawing Rights (SDRs), or about USD 2.9 bn, according to current rates. Under normal circumstances, IMF member countries can borrow up to 145% percent of their quota for any 12-month period, which would be about USD 4.2 bn for Egypt, or 435% over the 36-month program, which would be about USD 12.6 bn, according to IMF guidelines. (The IMF’s quota page, last updated on 29 July, 2016, actually puts Egypt’s SDRs at 2.0371 bn, or about USD 2.83 bn, meaning it can borrow USD 4.1 bn over 12 months or USD 12.3 bn over 36 months.)

Funding within 2-3 months? Finance Minister Amr El Garhy told Al Akhbar on Thursday that Egypt could expect to draw down the first tranche of the assistance package in about three months’ time. Deputy Finance Minister Ahmed Kouchouk said earlier on Thursday during a news conference that Egypt should receive at least USD 2 bn within two months of agreeing on a package, according to Reuters. The loan must be repaid within five years, plus a three-and-a-quarter year grace period, he said.

The IMF package isn’t the only card up our sleeves: El Garhy expects Egypt will receive the first tranche of the USD 3 bn World Bank loan inked late last year during the second quarter of the FY2016-17 fiscal year along. That’s October-December, roughly around when we should receive the second tranche of the African Development Bank (AfDB) facility, El Garhy is said to have told Al Akhbar. The minister also noted the funding hinges in part on the Housing passing the value-added tax legislation. Kouchouk added that the second tranche of its three-year, USD 1.5 bn loan to support the state budget in September. The release of the funds hinges on “eight reforms including in the energy, electricity, trade and industry sectors,” said Finance Ministry spokesman Ayman Al-Kaffas, adding: “There is a meeting of the board of directors [of the AfDB] in September… Hopefully we will get the approval and receive the second tranche,” he said. We had noted earlier this month that the AfDB meeting was supposed to take place in October.

Further, Egypt will begin this week the search for international institutions to arrange a USD 2-3 bn Eurobond in September or October, said Kouchouk. “If we implement the reform program, and get the IMF’s stamp of approval, our borrowing costs will drop," Kouchouk said, according to Bloomberg. “We’re creating the right conditions to go to the market.”

Meanwhile, officials are also going out of their way to explain to the public that borrowing from the IMF gives Egypt a “lower than market” interest rate, according to remarks by Finance Ministry spokesman Al-Kaffas. Al Shorouk quotes an unnamed official as saying the final figure should be in the 1.25-1.75% range.