Foreign coverage on Egypt is largely concerned with our prospective IMF lifeline: Bloomberg quotes liberally from EFG Hermes economist Mohamed Abu Basha, who says that while the agreement will bring in much-needed liquidity, Egypt “will have to take some tough measures before the economy starts witnessing serious inflows from abroad.”

The Wall Street Journal quotes emerging market economist at Capital Economics William Jackson as saying the loan would “almost certainly entail a further devaluation of the currency.” Abu Basha is a hair more cautious, saying in a note yesterday: “A successful float of the EGP would first require building a liquidity shield to enable authorities to stabilize FX markets post-adjustment and to minimise inflationary impact. We therefore expect such a move, which clearly will be a key component of the IMF programme, to take place once an IMF agreement is concluded rather than in the immediate future.”

On the bright side, Egypt has seen much worse. At least according to a piece in the National from veteran financial writer Patrick Werr. In 1990, “Egypt had [USD 50 bn] in foreign debt, its budget deficit was more than 8 per cent of GDP and banks were refusing to lend the government more funds.” Its “white knight” at the time was the cancellation of almost USD 14 bn in debts after Cairo agreed to send troops to liberate from Iraq’s invasion Kuwait. Egypt then “committed itself to the classical IMF remedy of privatisation, liberalising trade and freeing up currency and interest rates. It also implemented a sales tax. For the next seven years or so the economy boomed,” he writes. If Egypt’s IMF white knight this time around rides to the rescue, “it will be the best economic news the country has had in years. Perhaps even 26 years.”