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Qatar pledges $2bn for Egypt's central bank

in International Business

Qatar pledges $2bn for Egypt's central bank

Qatar has pledged to deposit $2bn at the Egyptian Central Bank, after a meeting in Cairo on Saturday between President Mohamed Morsi and Qatar’s emir, Sheikh Hamad bin Khalifa Al Thani.

 Egypt’s foreign reserves have declined dramatically since the popular uprising against Hosni Mubarak last year, sending the economy into a tailspin and leading the central bank to start selling dollars to lift up the country’s pound.

 Experts believe financial aid is required urgently to avoid currency devaluation, as the economy faces a looming balance of payments crisis and high state borrowing costs.

 Morsi’s cabinet is faced with deciding on serious measures in order to stabilise government finances and secure foreign financial help.

 Political unrest has deterred tourists and foreign investors and prompted government employees to strike for higher wages.

 Since the fall of Mubarak in February 2011, the central bank’s reserves have fallen sharply to $14.4bn, down from $36bn a year and a half ago.

 This shortfall in cash has raised doubts about Egypt’s ability to maintain imports of basic commodities such as wheat and refined fuel, and whether it can honour its international financial commitments.

 A mission from the International Monetary Fund (IMF) is due to arrive in Cairo later this month to resume talks over a $3.2bn loan, which has been delayed by political tensions.

 The Egyptian government forecasts a growth of 3.5 to 4 per cent in the 2012 to 2013 fiscal year.


Tags assigned to this article:
Egypt Central BankEgypt economyQatar - Egypt aid

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