Money Saudi Arabia says it has signed a series of deals with Egypt aimed at helping stabilise the North African nation’s struggling economy. A statement Thursday from the Saudi ambassador to Egypt says the Kingdom has agreed to provide $500 million in aid to Egypt and will deposit an additional $1 billion at the country’s central bank.
Ambassador Ahmad Kattan also says Riyadh will meet a request by Egypt to import $250 million worth of butane gas. Egypt has faced ongoing shortages of the cooking fuel.
Saudi Arabia has transferred $1 billion to Egypt’s central bank as an eight-year deposit, Egypt’s planning minister Faiza Abu El-Naga said Thursday.
Egypt, which is also negotiating a $3.2 billion loan from the International Monetary Fund, has been seeking funds from international donors to help it plug a balance of payments deficit aggravated by the political and economic turmoil of the last 15 months.
Before it agrees to the loan, the IMF has told Egypt to come up with an economic programme that has broad domestic political support and to line up additional resources from international donors.
The IMF loan will be crucial to repairing the damaged perception of the Egyptian economy among foreign investors and forestalling an imminent currency devaluation.
Egypt’s economy took a beating following last year’s ouster of former president Hosni Mubarak and the political chaos that followed. The country needs outside aid to offset dwindling cash reserves.