Egypt's foreign reserves only boosted by Qatar
Eygpt's foreign reserves have risen to $15.5 billion, helped by a deposit by Qatar to support the economy, the North African country’s finance minister said, although reserves are still close to critical levels after being run down to defend Egypt’s currency.
The central bank put reserves at $15.015 billion at the end of December. It has implemented a new regime for buying and selling foreign currency and currency controls to try to stem a fall in reserves, which have tumbled from $36 billion before the uprising that toppled Hosni Mubarak in early 2011.
Qatar said last month it had lent Egypt $2 billion and given it $500 million outright. It has pledged to stand by Egypt to help support the nation, which has been battered by political turmoil and violence that has scared away investors.
Al Mursi al Sayed Hegazy, the Egyptian finance minister, said reserves should rise further in future after approval on a draft law allowing Egypt to issue sovereign Islamic bonds, known as sukuk. The draft law has been passed by cabinet but needs the backing of the Islamist-led upper house of parliament.
The minister said in December that Qatar had deposited $500 million, although the reserve figure for that month was still around $15 billion, the same as at the end of November. The central bank has said reserves have reached a critical level. At $15 billion, reserves cover roughly three months of imports.
Egypt has spent about $21 billion of its reserves since the start of 2011 when the uprising against Mubarak erupted, plus several billion dollars in additional aid and support from Qatar and other donors to defend the Egyptian pound.Cairo is negotiating a $4.8 billion loan from the International Monetary Fund (IMF).
After the deal was agreed in principle in November, it was delayed after Egypt postponed some unpopular tax rises viewed as needed to secure the IMF funds. An IMF team is expected to return to Egypt in the coming weeks for fresh discussions.