Officials from the IMF will visit Cairo this month to open talks with Egypt's new government about a possible US$3.2 billion (Dh11.75bn) loan.
The government of president Mohammed Morsi invited the fund, based in Washington, the IMF said.
"The IMF stands ready to support Egypt and work closely with the authorities," it said. After being sworn in last week, Egypt's new cabinet has been getting to grips with the grave state of public finances. Egypt needs the cash to help avert a looming balance of payments crisis and shore up confidence in its economy to tempt back foreign investors.
"The fact that the cabinet have called in the IMF after their first meeting is a good sign they are keen to make progress," said Jean-Michel Saliba, an economist for eastern Europe, the Middle East and Africa at Bank of America Merrill Lynch.
"It's optimistic. If the visit is in August then we may see a deal in September but there's a number of potential sticking points." One of those obstacles is ensuring broad political support behind an IMF deal.
Trying to push through potentially unpopular reforms, which are likely to be attached to the loan programme, could also prove thorny. An overhaul of the costly subsidy system is already on the table under the budget for next year.
But the IMF would like to see the removal of the general sales tax in place of a VAT system.
Egypt's former interim administration had been in on-off talks with the IMF about a possible loan since the overthrow of then president Hosni Mubarak last year. The finance minister, Mumtaz Al Saeed, who was reappointed by the cabinet to stay in his post, has made securing a deal a top priority for the government.
"Delivering on fiscal pledges may prove particularly difficult - although Mr [Al] Saeed drew up this year's budget under the temporary administration ... weak economic growth and high pressures on spending will make it very challenging to hold the shortfall to the 7.6 per cent of GDP target and a significant overshoot seems likely," said Simon Williams, the chief economist in the Middle East at HSBC.
