Egypt says it has received $500 million Qatar deposit

August 24, 2012

RECORDER REPORT

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Egypt said on Thursday it had received an initial $500 million loan from Qatar, part of its effort to secure international finance to stave off a financial crisis. The state news agency MENA quoted Finance Minister Mumtaz El-Saeed as saying it was the first tranche of $2 billion the Gulf emirate had promised to deposit with Egypt's central bank, and that the remainder was expected to arrive next month.

Qatar announced earlier this month it was providing the loan. Egypt has been rapidly depleting its foreign reserves since the popular uprising that toppled Hosni Mubarak led the central bank to sell dollars to prop up the country's pound.

The economy now faces a balance of payments crisis and is being further undermined by high state borrowing costs. On Wednesday, Egypt formally requested a $4.8 billion from the International Monetary Fund (IMF) to help it shore up its balance of payments and to help plug a budget deficit expected to reach 7.9 percent of gross domestic product.

The Saudi-based Islamic Development Bank (IDB) agreed last month to provide Egypt with $1 billion to finance energy and food imports, and in May Saudi Arabia provided Egypt's central bank with a $1 billion, eight-year deposit and a $750 million credit line for oil imports. The latest pledge from Qatar is one of several disbursements by the emirate to help out governments across the Middle East and North Africa since the Arab Spring. Qatar gave Egypt a one-time grant of $500 million in October 2011, MENA added.