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Tue 23 Aug 2016 12:44 AM

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UAE agrees to provide Egypt central bank with $1bn deposit

Egypt has previously also secured pledges from the UAE and Saudi Arabia for about $4.5bn

UAE agrees to provide Egypt central bank with $1bn deposit

The United Arab Emirates has agreed to provide Egypt's central bank with a $1 billion deposit for a duration of six years, the United Arab Emirates' official state news agency WAM said on Monday.

Egypt this month signed a preliminary deal for a $12 billion IMF lending programme contingent upon the government securing $5-6 billion in bilateral financing for the first year.

Egypt has previously also secured pledges from the United Arab Emirates and Saudi Arabia for about $4.5 billion, but none of the promised transfers have yet materialised.

The International Monetary Fund (IMF) agreed in principle to grant Egypt the $12 billion three-year facility to support a government reform programme aimed at plugging a budget gap and rebalancing the currency market, but this must still go to the IMF board for approval.

Egypt's net foreign reserves fell sharply to $15.536 billion at the end of July.

The North African country had roughly $36 billion in reserves before an uprising in 2011 overthrew Hosni Mubarak. That ushered in a period of political turmoil that scared away tourists and foreign investors, key sources of foreign exchange.

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