WASHINGTON (Reuters) - The International Monetary Fund said on Thursday it will not engage in talks about a possible $4.8 billion loan to Egypt until the country's interim government gains recognition from the international community.
IMF deputy spokesman William Murray repeated that the Fund has not been in touch with the current government in Egypt, only with bureaucrats on the technical level.
"It's a case of the international community ... its institutions, its nations, coming together and recognizing a particular government," Murray told reporters on Thursday. "That would be true anywhere.
"And until that happens, and until our members make a decision on the Egyptian government, we're going to keep our context technical (at the technical level)."
The IMF had been negotiating a critically needed $4.8 billion loan with Egypt before the military removal of elected President Mohamed Mursi in early July.
The current Egyptian cabinet as a whole has not yet said clearly whether it will resume talks with the IMF about the loan, which would come attached to economic reform commitments that the government might find politically risky.
Planning Minister Ashraf al-Arabi said last week that now was not the right time to restart negotiations with the IMF because $12 billion in aid from Saudi Arabia, the United Arab Emirates and Kuwait would carry Egypt through its transitional period.
The next parliamentary elections are expected in about six months, but any transition could be delayed by radical reforms of the budget system that hurt living standards and bring protesters back into the streets.
After a year of Mursi's administration, Egypt's fiscal position is desperate; in recent months government revenue has covered barely half of all expenditure, leaving borrowing and aid to make up the rest. An IMF loan is widely viewed as necessary to convince foreign donors and investors that Egypt's economy is on the right track.
(Reporting by Anna Yukhananov; Editing by James Dalgleish and Maureen Bavdek)