Egypt's central bank has said that a $2bn loan from Qatar arrived in December, suggesting that the money had already been eaten up defending the currency before the foreign reserves crisis became public late last year.
News of the Qatari loan broke this week, and markets assumed that Egypt therefore had a cushion that would allow it to keep the pound's depreciation orderly, supporting Egyptian assets.
Political strife in late November and early December set off a rush to convert Egyptian pounds to dollars, sending the currency to record lows on concerns the government might devalue or bring in capital controls.
The central bank, which has spent more than $20bn defending the pound in the two years since Egypt's popular uprising, said on December 29 that its foreign reserves had reached a "minimum and critical limit" and announced a new currency regime as it struggled to stabilise the pound.
But on Sunday the bank said Egypt's foreign reserves had fallen in December by only $21m, to $15.015bn.
Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani announced on Tuesday that Qatar had lent the country $2bn and given it an extra $500m outright.
Asked by email on Thursday if the deposit arrived in January or December, Nidal Assar, the bank's sub-governor for investment and foreign relations, replied: "December".
Analysts said that the Qatari deposit's arrival in December indicated that switching out of pounds and into dollars had been much greater than thought over the last few weeks.
"That shows the scale of dollarisation in December and explains the shift to auctions on the part of the central bank," said Said Hirsh, an economist with Maplecroft.
Egypt has been negotiating a $4.8bn loan from the International Monetary Fund (IMF) to deal with the crisis and expects an IMF team to visit Cairo in two to three weeks.
The loan agreement was approved in principle in November, but political turmoil in December forced the government to delay a series of austerity measures deemed necessary to win the IMF board's final approval.
"Without Qatari aid, Egypt was on course for a full-blown financial crisis and, perhaps, a forced deal with the IMF by February," Hirsh said.
Egypt's ambassador to Turkey said Ankara had transferred $500m into Egyptian coffers on Thursday, the Egyptian state news agency said.
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