$5.8 bn of fresh Gulf aid to Egypt

Waad Ahmed , Thursday 30 Jan 2014

New Saudi aid package to come in form of central bank deposits and petroleum products, as UAE also steps up pledges

Hisham Ramez
New Egypt Central Bank's governor, Hisham Ramez (Photo: Al-Ahram)

Saudi Arabia is expected to give Egypt up to $4 billion in additional aid in the form of central bank deposits and petroleum products, Egyptian daily newspaper Al-Ahram reported on Thursday. 

The UAE is also expected to contribute $1.8 billion to the new aid package in the form of fuel shipments, an unnamed ministerial source told the paper. 

In September 2013, Mohammed Bin Zayed Al-Nahyan, the crown prince of Abu Dhabi, pledged an additional aid comprising deposits and grants to support Egypt,
The new aid package will be worked out during a visit next week to the oil-rich kingdom by Egypt's interim Prime Minister Hazem El-Beblawi, added the source.

According to Al-Ahram, half of the latest Saudi aid package is expected to be deposited at the Central Bank of Egypt (CBE) before the end of January, with the other half to be delivered in the form of fuel shipments

Gulf Arab states have pledged $12 billion to Egypt since the 3 July overthrow of Islamist President Mohamed Morsi of the Muslim Brotherhood.

An anonymous source familiar with the matter told Ahram Online on Thursday that Egypt has already received the full amount of the first Gulf aid package in the form of deposits at the CBE, grants and fuel shipments.

The funds have kept the economy afloat during political turmoil, which has hit investment and tourism particularly hard.

CBE governor Hisham Ramez assured earlier this week in televised statements that foreign reserves will not fall below their current level of $17.03 billion, despite holding an exceptional FOREX auction earlier this week which sold off $1.5 billion.

Banks and state-run institutions snatched up the dollars in order to import staple commodities, raw materials and pharmaceutical components.

Egypt is expected to shortly announce the details of its second economic stimulus package since Morsi's ouster, amid hopes of boosting tepid growth rates and reassuring investors, Finance Minister Ahmed Galal said on Tuesday.

The Egyptian economy grew by just 1.04 percent in the first quarter of the 2013/14 fiscal year, according to CBE data. 

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