Qatar pledges another $3 billion to Egypt

Lifeline extended to President Mursi after repeated delays in loan talks with IMF

Qatar's prime minister Sheik Hamad bin Jassim Al Thani (right) chats with Egypt's prime minister Hisham Kandil in Doha today. Photograph:  Reuters

Qatar's prime minister Sheik Hamad bin Jassim Al Thani (right) chats with Egypt's prime minister Hisham Kandil in Doha today. Photograph: Reuters

Wed, Apr 10, 2013, 15:01

Qatar pledged another $3 billion in aid to Egypt, extending the lifeline for Islamist President Mohamed Mursi after repeated delays in loan talks with the International Monetary Fund.

The funds will be deposited at Egypt's central bank, Qatari prime minister Sheik Hamad Bin Jassim Al Thani said at a press conference today in the Gulf state with his Egyptian counterpart Hisham Qandil.

Egypt's Eurobonds extended their rally after the announcement, with the yield on debt due in 2020 dropping 19 basis points to 7.23 per cent.

Qatar has already provided Egypt with $5 billion in deposits and grants, helping to shore up the finances of the Arab world's most populous nation as investment and tourism declined amid the turmoil that followed the 2011 uprising against Hosni Mubarak.

The Egyptian premier and several other top ministers arrived yesterday, as an IMF technical team continues talks in Cairo over Egypt's $4.8 billion loan request.

Two years of political unrest have left Egypt's economy growing at the slowest rate in two decades. The nation's foreign currency reserves plunged to $13.4 billion last month, more than 60 per cent below their December 2010 level, and its currency has dropped more than 10 percent in the past four months.

Officials say they aim to boost reserves to $16 billion by the end of June, without saying how.

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