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Thursday, 05 August 2021

Egypt gets $400 million from Islamic trade financier

Islamic Development Bank offers Sharia-compliant financing to cover oil products and food imports, as Egypt still awaits pledged and much-needed aid from Gulf states

Reuters, Sunday 6 Nov 2011
Islamic Development Bank will provide Sharia-compliant funding for Egypt's trouble economy (Photo: IDB)

The trade financing arm of the Islamic Development Bank (IDB) has offered US$400 million to help Egypt finance imports of petroleum products, wheat and other foodstuffs, Egypt's official news agency MENA reported on Saturday.

The funds were offered by IDB's International Islamic Trade Finance Corporation, which offers trade finance that conforms to Islamic principles, MENA reported.

Egypt is the world's biggest wheat importer.

Egypt's economy has been hurt by an uprising that unseated Hosni Mubarak in February and uncertainty about the political outlook. Investors have fled and tourists are only slowly returning, draining key sources of foreign currency.

Egypt has said it is negotiating aid packages with the Gulf Arab states to provide budgetary and other financial support, but only some of those funds have flowed in so far.

The government forecasts a deficit of 8.6 per cent of gross domestic product in the year to June 2012, although economists expect it to be bigger.

The central bank's foreign reserves have tumbled from about $36 billion before the uprising to a little more than $22 billion at the end of October.

An IMF mission wrapped up a visit to Egypt this week but gave no word on whether the interim government had made a fresh request for IMF funds after Egypt turned down an offer of aid in June.

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