Qatar boost financial aid to Egypt to help deal with currency crisis
Qatar said on Tuesday it would lend Egypt's government an additional $2 billion and grant it an extra $500 million outright, extending a lifeline as the government battles to contain a currency crisis.
“There was an initial package of $2.5 billion, of which $0.5 billion was a grant and $2 billion a deposit,” Sheikh Hamad bin Jassim al-Thani told reporters after meeting Egyptian President Mohamed Mursi.
“We discussed transferring one of the deposits into an additional grant so that the grants became $1 billion and the deposits double to around $4 billion,” he said.
Egypt has been facing a financial crisis as a month of political strife has cast doubts on the government’s ability to push through unpopular spending cuts and tax hikes needed to persuade the International Monetary Fund to agree to a $4.8 billion loan.
Egypt has spent more than $20 billion in foreign reserves to support the Egyptian pound since the popular uprising that toppled Hosni Mubarak in early 2011.
Reserves fell by $448 million in November to reach $15 billion at the end of the month, equal to only about three months of imports.
The political turmoil has led to a run on the pound, with many investors and ordinary citizens rushing to convert into foreign currencies on concern the government might be forced to allow a sharp devaluation.