Published: Apr 20, 2012 02:00 Updated: Apr 20, 2012 02:00
CAIRO: Saudi Arabia will deposit $1 billion at the Egyptian central bank and buy T-bonds worth $750 million by the end of April as part of a $2.7 billion package to support Egypt’s battered finances, an Egyptian official said yesterday.
Egypt’s foreign reserves have tumbled by more than $20 billion to $15.12 billion during the political turmoil and spasms of violence since Hosni Mubarak was ousted from power last year. The budget deficit has spiraled.
The Egyptian official told Reuters the Saudi package had been agreed two days ago at a meeting of Arab officials in Morocco.
The Egyptian official said the package includes $250 million of support to buy fuel, which could help intermittent shortages that have led to queues at gasoline stations and fueled public anger.
It will also include $500 million in project finance with a additional $200 million going to small- and medium-sized enterprises, the official added.
An imminent financial crunch is overshadowing Egypt’s transition from army to civilian rule. Egyptians vote in May on a new head of state to whom the military is due to hand power on July 1.
Economists have said dispersal of the funds would provide relief for Egypt but add the country needs to swiftly stabilize its economy by drawing back tourists and the kind of investment it was attracting before the anti-Mubarak uprising.
NOTE BY THE EDITOR: We often read in Newspaper comments in Europe ‘why do not the Arabs help each other’. In fact they do, as this articles shows. It is just ‘under-reported’ in Western Newspapers.