Published — Sunday 20 January 2013
Last update 20 January 2013 12:50 am
CAIRO: Egypt's foreign reserves have risen to $ 15.5 billion, helped by a deposit by Qatar to support the economy, its finance minister said, although they 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.
Finance Minister Al-Mursi Al-Sayed Hegazy told reporters about the new reserve figure yesterday without giving further details about the deposit by Qatar, a generous donor to Egypt.
Qatar said earlier this 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.
Hegazy said reserves should rise further in future after approval of a draft law allowing Egypt to issue sovereign Islamic bonds, known as sukuk. The draft law was passed by Cabinet this week but needs the backing of 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. 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.