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Thursday, 29 July 2021

Egypt receives $500 million from Qatar, 500 more from Turkey soon

Egypt has received the final tranche of Qatar's loan, and is eying further aid from Turkey and Saudi Arabia

Reuters and Ahram Online, Saturday 29 Dec 2012
President Morsi and Prince Hamad

Egypt has received a final $500 million instalment of funds promised by Qatar and will get another $500 million from Turkey at the end of January, Egypt's finance minister said, in the latest aid to help balance its budget and defend its currency.

Egypt has been facing a financial crisis as a month of political strife has cast doubts on the government's ability to push through unpopular spending cuts and tax hikes needed to persuade the International Monetary Fund to agree to a $4.8 billion loan.

Finance Minister Mumtaz Al-Said said Saturday that Egypt had received the final installment out of a total of $2 billion promised by Qatar, although he did not give a date.

"Egypt will receive the remaining $500 million of the Turkish loan at the end of January," he added.

Egypt has spent more than $20 billion in foreign reserves to support the Egyptian pound since the popular uprising that toppled Hosni Mubarak in early 2011.

Reserves fell by $448 million in November to reach $15 billion at the end of the month, equal to about three months of imports of necessities.

Political turmoil has led to a run on the pound, with many investors and ordinary citizens rushing to convert deposits into foreign currencies on concern that the government might be forced to allow a sharp devaluation.

On Thursday, the Egyptian Central Bank allowed the pound to weaken to an eight-year low of 6.188 to the US dollar.

Qatar said in August it would deposit $2 billion with Egypt's Central Bank in four $500 million installments to help support the budget, and later that month Egypt said that it had received a first tranche.

Egypt said in October that Turkey had would lend it $1 billion in two tranches, also for budget support, with one tranche coming in October and the second in January.

In June, before Mohamed Morsi of the Muslim Brotherhood was elected president, Egypt said Saudi Arabia had sent $1.5 billion in budget support as part of a $2.7 billion aid package.

"We are still negotiating the remainder of the Saudi aid package," Said said.

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