A vital £2.98 billion International Monetary Fund loan to Egypt will be delayed until next month, as it battles political crisis.
The announcement came after President Mohamed Morsi yesterday backed down amid huge protests on planned tax increases, which were seen as key for the loan to go ahead.
Finance Minister Mumtaz al Said said the delay in the loan agreement was intended to allow time to explain a heavily criticised package of economic austerity measures to the Egyptian people. Speaking to Reuters, he said:
Of course the delay will have some economic impact, but we are discussing necessary measures (to address that) during the coming period. ... I am optimistic ... everything will be well, God willing.
Prime Minister Hisham Kandil said Egypt had requested that the loan be delayed by a month.
"The challenges are economic not political and must be dealt with aside from politics," he told a news conference.