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Egypt Salafis Lured as IMF Aid Beats AA Debt: Islamic Finance

Published: 01/10/2012 07:24:11 PM GMT
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Hossam Aql, an Egyptian professor of Islamic studies, encountered an unusual question on a religious radio talk show last month: is it acceptable for (more)

Hossam Aql, an Egyptian professor of Islamic studies, encountered an unusual question on a religious radio talk show last month: is it acceptable for the government to borrow from the International Monetary Fund?

His answer was yes. In times of extreme need, he said, Muslims are allowed to resort to non Shariah-compliant options. Some groups, such as the ultra-orthodox Nour Party, which had decried the possible loan for violating Islam's ban on interest, are now saying that Islamic debt can't replace the $4.8 billion IMF accord. Egypt, rated 12 levels below Qatar, will borrow at about half the rate the emirate paid for sukuk in July.

Egypt's worst economic slowdown in at least a decade is swaying a debate among Islamists toward those who favor the loan, making it easier for the government to secure the "critical mass" of support that the IMF says is needed for the agreement. Indonesia and Pakistan, the world's two biggest Muslim countries by population, have both received IMF funds.


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