Libya deposits $2 billion in Egypt central bank from investments

Reuters, Sunday 14 Apr 2013

The $2 billion Libyan financial aid to Egypt is a deposit not a loan, said the governor of the Libyan central bank

Central Bank of Egypt (Photo: Reuters)

 Libya has deposited $2 billion in Egypt's central bank deducted from investments Tripoli has inside its neighbour, the central bank governor said on Saturday.

Speaking to Reuters, Saddeq Omar Elkabber said the amount was a "central bank deposit not a loan", but did not give further details.

"Libya's investments in Egypt total around $10 billion. These are in banks, property and other sectors," he said.

"Egyptian stability is important for Libya," he said. "This is like when the European Union helped Greece."

Libyan Prime Minister Ali Zeidan told Reuters "there was no loan" made to Egypt but added the Libyan central bank "was free to make deposits where it chose".

On Wednesday, the Egyptian state news agency MENA reported Libya would give Egypt a $2 billion five-year, interest-free loan under an agreement signed that day.

It quoted a finance ministry official as saying the loan would have a three-year grace period and was intended "to support the Egyptian economy and the state budget and foreign currency reserves".

Also on Wednesday, Qatar agreed to give Egypt $3 billion more in aid by buying Egyptian government bonds, as the Arab world's most populous nation seeks to secure an IMF loan to ease its deepening economic crisis.

The new financial injections will buy Egypt time as it seeks to avert social unrest over fuel shortages and food price increases during a long, hot summer.

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