Egypt to IMF: Thanks, but no thanks, the Gulf's got us covered

Published September 15th, 2013 - 07:46 GMT
Lagarde refused to comment on the money that Egypt received from the Gulf Cooperation Council (GCC).
Lagarde refused to comment on the money that Egypt received from the Gulf Cooperation Council (GCC).

 Egypt has received oil shipments worth $800 million from Saudi Arabia in the months of August and September, Tareq Al-Mullah, the CEO of the Egyptian General Petroleum Company, told Anadolu Agency.

Al-Mulla said that the EGPC received a Saudi oil shipment worth $400 million in August and a similar quantity in September.

Riyadh has pledged $5 billion in aid to shore up Egypt’s faltering economy. This includes $2 billion interest-free deposits, a $1 billion grant and $2 billion worth of oil products, including diesel, fuel and gasoline shipments to be sent over five months.

Egypt spends $1.3 billion monthly on energy products imports to meet the increasing demands of the local market.

Meanwhile, Egypt’s Minister of Industry and Foreign Trade Mounir Fkhry Abdel-Nour said that the current government does not seek to obtain a loan from the International Monetary Fund (IMF).

Abdel-Nour noted that financial aid Egypt received from Saudi Arabia, the United Arab Emirates and Kuwait, in addition to other resources, are enough to help Egypt overcome its economic crisis.

Moreover, Kuwait will deposit $2 billion in aid in Egypt’s central bank next week, the Egyptian central bank governor said early this week.

Hisham Ramez told the Al Arabiya television network the money would stay in the central bank for five years.

Kuwait’s state news agency said the package would comprise a $2 billion central bank deposit, a $1 billion grant and $1 billion in oil products.

However, IMF remains strongly committed to helping the Egyptian people deal with their economic and financial challenges, said the fund’s communications director Gerry Rice on Thursday.

The remarks came after two years’ of negotiations between Egypt and the IMF over a $4.8 billion loan had stalled out following the 3 July ouster of former president Mohamed Morsi.

In her latest statements, the IMF’s managing director, Christine Lagarde, said the IMF is waiting for the “right time” to resume negotiations.

“Obviously, the situation has evolved, has been very unsettled, and everybody is watching the situation. We try to be as ready as we can when the time comes for Egypt to reinitiate discussions with us,” Lagarde said.

During the same press roundtable, Lagarde refused to comment on the money that Egypt received from the Gulf Cooperation Council (GCC). 

Meanwhile, the Central Bank of Egypt’s (CBE) foreign exchange reserve is expected to reach $20 billion by the end of 2014 as GCC countries announced their commitment to invest in the country over the next two years and help prop up the turmoil-hit domestic economy.

The overall reserves between July 2012 and April 2013 increased by EGP 6.5 billion to reach EGP 60.894 billion, while the allocations increased by EGP 12 billion to reach EGP 37.639 billion. 

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