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Sun 16 Sep 2012 10:09 AM

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Turkey to provide Egypt with $2bn finance

Egypt's new gov't has been seeking foreign help to plug deficits in its budget and balance of payments

Turkey to provide Egypt with $2bn finance

Turkey has agreed during a visit by Egyptian officials to Istanbul to provide Egypt with a US$2bn financing package, Egypt's finance minister said on Saturday.

Egypt's new government has been seeking foreign help to plug twin deficits in its budget and balance of payments that have mushroomed since last year's popular uprising. Last month it formally asked the International Monetary Fund for a US$4.8bn loan.

Mumtaz al-Saeed said he could not yet say whether the Turkish financing would include any direct budget support.

"We agreed on US$2bn in financing, but the details on how it will be structured have not yet been worked out yet," he told Reuters by telephone.

Turkey's embassy in Cairo said the US$2bn package aimed to strengthen Egypt's foreign currency reserves and support investment in infrastructure. Half would be in the form of bilateral loans.

Mumtaz and presidential assistant Essam al-Hadad discussed the package with Turkish Deputy Prime Minister Ali Babacan in a meeting in Istanbul, the embassy said in an emailed statement.

Qatar has promised Egypt US$2bn in loans to support the budget and on September 6 it pledged to invest US$18bn in Egyptian tourism and industrial projects over the next five years.

US officials said the Obama administration was close to a deal with Egypt's new government for US$1bn in debt relief, and on Saturday senior executives of around 50 US corporations begin a visit to Egypt to discuss new investments.

Egypt's is also in talks for additional budget support worth about US$1bn from the World Bank and the African Development Bank.

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