CAIRO: Egypt signed a deal earlier this year for a $2 billion central bank deposit from Saudi Arabia, International Cooperation Minister Sahar Nasr said on Thursday.
Egypt inked a raft of agreements with Saudi Arabia during a visit by the Saudi king in April, including plans for a 60 billion Saudi riyal ($16 billion) investment fund.
Nasr said the $2 billion deposit deal was also signed during King Salman’s visit. The deal had not been previously announced.
Egypt is scrambling to secure some $5 billion to $6 billion in bilateral financing needed to ensure that a $12 billion lending programmeme agreed with the International Monetary Fund last week will go ahead.
Nasr did not say when the Saudi deposit was expected to arrive and it was not clear whether it would be counted toward the financing of Egypt’s programmeme. “This is old money. I don’t know if they count that,” she said by text message.
Egypt, struggling to rebuild an economy battered by turmoil since a 2011 uprising, won staff-level agreement for the three-year IMF lending programmeme last week.
But IMF Egypt Mission Chief Chris Jarvis told Reuters that Egypt’s programmeme would require additional financing in the first year, including assurances of $5 billion-$6 billion in bilateral support, before he could take it to the board.
The Arab world’s most populous state has already secured pledges from the UAE for a $4 billion aid programmeme that would include a $2 billion central bank deposit and a development loan.
Egypt had also announced in May cabinet approval for a Saudi grant of $2.5 billion to be paid in tranches. The first $500 million tranche has already been disbursed.
Nasr said the $2 billion central bank deposit was part of a separate deal though both were signed during the king’s visit.
Previously pledged Gulf Arab aid could form part of the bilateral financing but the IMF needs assurances that the money will arrive in the first year of the programmeme, Jarvis told Reuters last week. He said then that the IMF would support Egypt’s effort to secure the financing it needs.
Armed with an IMF-approved reform agenda, the government has said it will go to international markets with a Eurobond issuance of $3 billion to $5 billion as early as September.
Egypt expects Arab allies to provide aid as part of IMF deal
CAIRO: Egypt expects its allies such as Saudi Arabia and the UAE to provide funding as the country moves to finalise a $12 billion loan programmeme with the International Monetary Fund, Prime Minister Sherif Ismail said.
International financial institutions will also help finance the government’s three-year programme with the Washington-based lender, Ismail told Bloomberg News in Cairo on Wednesday. The IMF’s Executive Board will not consider the loan deal before Egypt secures commitments of as much as $6 billion from bilateral creditors, Chris Jarvis, the fund’s mission chief for Egypt, said on Aug. 14. He said the fund would help the government secure the money.
Egypt is targeting $21 billion over three years to restore investor confidence and ease a crippling foreign-exchange shortage. Net international reserves dropped to $15.5 billion in July, the lowest level in 16 months.
In addition to the IMF loan, funds will come from the World Bank, the bond market and bilateral accords, officials have said.