Published — Monday 31 December 2012
Last update 29 December 2012 9:38 pm
CAIRO: Egypt has received a final $500 million instalment of funds promised by Qatar and will get another $500 million from Turkey at the end of January, its finance minister said, in the latest aid to help balance its budget and defend its currency.
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.
Finance Minister Mumtaz Al-Saeed said Egypt had received the final instalment out of a total of $2 billion promised by Qatar, although he did not give a date.
“Egypt will receive the remaining $500 million of the Turkish loan at the end of January,” he added.
Egypt has spent more than $20 billion in foreign reserves to support the Egyptian pound since the 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.
On Thursday, the central bank allowed the pound to weaken to an eight-year low of 6.188 to the US dollar.
Qatar said in August it would deposit $2 billion with Egypt’s central bank in four $ 500 million instalments to help support the budget, and later that month Egypt said that it had received a first tranche.
Egypt said in October that Turkey had would lend it $1 billion in two tranches, also for budget support, with one tranche coming in October and the second in January.
In June, before Mohamed Mursi of the Muslim Brotherhood was elected president, Egypt said Saudi Arabia had sent $1.5 billion in budget support as part of a $ 2.7 billion aid package.
“We are still negotiating the remainder of the Saudi aid package,” Saeed said.