Egypt secures $2 billion repurchase transaction from global banks

Ahram Online , Thursday 10 Nov 2016

The $2 billion loan comes a day before the IMF is due to meet to decide on a $12 billion loan package for Egypt

Central bank
Central Bank of Egypt's headquarters is seen in downtown Cairo, Egypt, November 3, 2016. (Reuters)

The Central Bank of Egypt has reached a deal to secure $2 billion in financing from global banks, the bank said in a statement Thursday.

The central bank "initiated a repurchase transaction with a consortium of international banks for a total amount of funding of $2 billion with a maturity of one-year," the statement said.

The funds were provided by the banks against "the entire amount of newly issued Egyptian dollar-denominated sovereign bonds with maturities of Dec 2017, Nov 2024, and Nov 2028, held by the CBE, which are listed on the Irish Stock Exchange."

The financing “bolsters the liquidity and size of the international reserves of the CBE" and reflects international banks' confidence in Egypt's economic reform program, the central bank said.

The terms were reached a day before the International Monetary Fund’s board meets to decide on a $12 billion loan package Egypt received initial approval of.

Officials say the new IMF loan will help regain investor confidence in Egypt's economy, battered by years of political turmoil since the 2011 uprising drove away foreign investors and tourism, two key sources of foreign currency.

Egypt’s reserves fell by over $550 million from September to reach $19 billion at the end of October, far below a record $36 shortly before the revolution.

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