Egypt to receive $5bn in loans from UAE and Saudi Arabia: Source

Waad Ahmed, Ahram Online, Monday 13 Oct 2014

Saudi Arabia and UAE pledge $5 billion to prop up Egypt FX reserves after return of Qatari deposits

Saudi Arabia's King Abdullah (Photo: Reuters)

Saudi Arabia and the United Arab Emirates will deposit LE35 billion ($5 billion) in the Central Bank of Egypt in two installments starting this month, a source familiar with the matter told Ahram Online on Monday.

The sums will be loaned to Egypt on concessionary terms, with maturities of between 3 and 5 years, said the source.

Concerns have been mounting about Egypt's foreign currency position since CBE governor Hisham Ramez announced that Egypt would be returning $2.5 billion in deposits to Qatar in November, having returned another $500 million earlier this month.
Qatar was a strong supporter of the Muslim Brotherhood's Mohamed Morsi, offering Egypt with some $7.5 billion in financial aid throughout his year-long rule, but relations between the two countries soured following Morsi's ouster in July 2013.

Egypt will have returned all of the Qatari aid after November's payment.

The UAE, Saudi Arabia and Kuwait, have since stepped in as Egypt's primary benefactors, showering Egypt with over $20 billion in loans, grants, and petroleum aid since last summer.

According to the source, Egypt will receive more than half of the sum before the end of the month to precede its payment to Qatar.

Saudi Arabia will be contributing $2 billion, said the source, at least half of which will be paid this month while the UAE has pledged $3 billion.

Egypt's net international reserves, which stood at some LE$36 billion before a revolution toppled the long-time regime of president Hosni Mubarak in February 2011, currently amount to $16.8 billion, according to the latest CBE monthly update.

Official sources contacted by Ahram Online could neither confirm nor deny the reports, which have been widely reported in local and regional media. 

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