Egypt returns $3 bn deposit to Qatar

Bassem Abo Alabass, Wednesday 4 Dec 2013

Central Bank of Egypt has returned a $3 billion deposit to Qatar, says governor Hisham Ramez; net international reserves dip slightly in November


Egypt has returned a $3 billion deposit to Qatar, central bank governor Hisham Ramez said on Wednesday.

Qatar sent Egypt $3 billion in May, of which $1 billion was converted into three-year bonds.

Cairo's relations with Qatar deteriorated after Islamist president Mohamed Morsi was deposed on 3 July. Qatar had been a firm backer of his Muslim Brotherhood and lent or gave Egypt $7.5 billion during the year he was in power.

Speaking at an Egypt-Gulf Cooperation Council forum, Ramez confirmed a Turkish deposit would not be returned until the end of its four-year maturity.

Egypt's net international reserves (NIR) dipped slightly in November compared to October, but the number is yet to be revealed, Ramez said.

The NIR fell due to governmental commitments, such as purchasing basic commodities.

Returning the Qatari deposit also influenced the slight decline, he added.

Asked by Reuters whether he anticipated more Gulf aid, he said: "Yes we do ... But I have no number in mind. Actually we're not only counting on aid, we're counting on investments to come in.

"The NIR stood at $18.6 billion in October, down $119 million from the month before.

Standard & Poor's recent upgrade for Egypt is a positive step in increasing economic growth and proof the country is recovering, Ramez added.

The international credit rating agency raised its long- and short-term foreign and local currency sovereign credit ratings for Egypt in November from "CCC+/C" to "B-/B" with a "stable" rating outlook.

The central bank is currently working on a stimulus package to boost the stuttering domestic housing sector through mortgages, particularly to help the construction of mid-level houses.

When the cash liquidity of Egypt's banking sector stands at a high and stable level, banks will do business and fund projects, Ramez said. 


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