Egyptian Planning Minister Ashraf El-Araby (Photo: Ahram)
Egypt is negotiating the interest rate on $3 billion worth of Egyptian treasury bonds that Qatar committed to buying earlier this month, Planning Minister Ashraf El-Araby has said in comments reported by state-owned Al-Ahram daily.
The interest rate for the bonds, which the oil-rich nation announced it would acquire on 10 April, will be between 4 and 7 percent, the minister specified.
At the time of the announcement, an anonymous source at the Central Bank of Egypt (CBE) told Al-Ahram's Arabic-language news website that the interest rate on the dollar-denominated bonds for Qatar would range between 3 and 4 percent.
The Gulf nation has already granted cash-strapped Egypt $5 billion, including a $1 billion grant and $4 billion worth of deposits at the CBE, since the country's January 25 Revolution.
Speaking on the side of an agriculture event, El-Araby went on to say that Egypt had received the first $1 billion tranche of an interest-free loan from neighbouring Libya last week.
Libya pledged a five-year, $2 billion dollar loan to Egypt on the same day as Qatar granted the additional aid to Egypt.
The minister expressed confidence that Egypt, whose foreign exchange reserves reached a record low of $13.4 billion in March, would reach its target of $16 billion in reserves by the end of June, with help from international donors.
El-Araby cited a $1 billion loan pledged by the World Bank, $500 million from the African Development Bank, $900 million in aid from the European Union and $450 million from the United States.
All such aid, as the donors have made clear, is strictly conditional on Egypt reaching a deal with the International Monetary Fund based on tough economic reforms to secure a $4.8 billion package from the lender. This would act as a seal of approval on Egypt's economic prospects and unlock further aid and investments.
Last week, a Fund official was quoted by state news agency MENA as saying that Egypt could reach a deal on the long-awaited loan by the end of May. The comment came a few days after meetings in Washington between IMF head Christine Lagarde and a high-level Egyptian delegation seemed to bring the two sides closer to an agreement.
The planning minister added that the government expects a growth rate of 2.5 percent in the current fiscal year, and is targeting 3.8 percent growth in the 2013-14 fiscal year.
Earlier this month, the IMF revised previous forecasts down to 2 percent for Egypt's growth this year, and placed next year's estimate at 3.3 percent in its World Economic Outlook report.