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Fri 24 Jan 2014 10:47 AM

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Egypt to return $3bn to Qatar this year

Central bank source says payments will be made to Gulf state in October and November

Egypt to return $3bn to Qatar this year

Egypt will return $3 billion that were invested in bonds to Qatar when the debt matures by the end of the year, a central bank source has told Reuters.

"We will return $500 million to Qatar in October and $2.5 billion in November (for) the bonds," the source said.

Three years of political instability have left the Egyptian economy in tatters, with tourists and investors abandoning the country of 85 million people.

Qatar had been a firm backer of Mohamed Mursi's Muslim Brotherhood and lent or gave Egypt $7.5 billion during the year the Islamist was president.

But relations deteriorated after the army ousted Mursi in July after mass protests.

In September, Egypt returned $2 billion that Qatar had deposited with its central bank after talks to convert the funds into three-year bonds broke down.

The central bank also returned a $500 million deposit to Qatar in November and another $500 million in December after the Gulf country refused to renew the deposits upon its maturity.

Other Gulf countries, who deeply distrust the Muslim Brotherhood, stepped in to support the army-backed government installed after Mursi was desposed. Saudi Arabia, the United Arab Emirates andKuwait pledged more than $12 billion.

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