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Sun 12 Aug 2012 11:46 AM

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Qatar grants Egypt $2bn loan to aid economy

Cash announced during Qatari emir's visit to Egypt; will be used to support flagging economy

Qatar grants Egypt $2bn loan to aid economy
“The State of Qatar has decided to deposit $2bn at the Egyptian Central Bank (pictured),” the statement said.

Qatar has granted Egypt a
US$2bn loan in an effort to help support the country’s flagging economy, Egypt’s
official state news agency said.

The loan was announced
during the first visit of Qatari emir Sheikh Hamad bin Khalifa Al Thani
to Egypt since former president Hosni Mubarak was ousted during last
year’s Arab Spring, MENA said.

Al Thani met with the newly
elected Islamist President Mohamed Mursi during a visit to Cairo on Saturday.

“The State of Qatar has
decided to deposit US$2bn at the Egyptian Central Bank,” the statement said.

The Egyptian economy has
suffered since the fall of the old regime with tourists and investors scared
off following a year-and-a-half of political upheaval.

The country’s foreign
reserves have declined to US$15.5bn, below half the level they were at in January
2011 while interest rates have increased to 16 percent, the highest in a
decade.

The Egyptian government
expects a growth rate of 3.5 percent to 4 percent in the 2012-2013.

Egypt has asked the
International Monetary Fund for a US$3.2bn aid package, the disbursement of which
has been delayed amid political tensions.

Saudi Arabia in May
transferred US$1bn into Egypt’s central bank. Egypt’s Planning Minister told
Reuters that “coordination was ongoing” with Saudi Arabia about a US$2.7bn aid
package.

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