Qatar Grants Egypt Extra $3Bn Financial Aid

Thursday, 11 April 2013

Qatar Grants Egypt Extra $3Bn Financial Aid

Qatar Prime Minister announced on Wednesday it will grant Egypt an extra $3bn in financial aid. Bin Jassem with Qandil

The announcement came after an unexpected trip this week by most of the Egyptian cabinet to the Qatari capital, Doha, after signs of discord emerged between the two countries, partly over a stalled banking deal.

Sheikh Hamad bin Jassem al-Thani spoke of “the importance of relations between Egypt and Qatar continuing at the same pace and at the same momentum” during a press conference announcing the aid package.

Bin Jassem said the latest round of financial support would be provided within days either as a deposit in Egypt’s central bank or purchases of Treasury bonds. Egypt’s main stock index remained flat on the news, dipping slightly after falling 5.7 per cent so far this year.

The announcement followed talks with visiting Egyptian Prime Minister Hesham Qandil.
Qatar has already given Egypt $5bn in financial aid since the 2011 revolution that ousted Hosni Mubarak. Amid signs of frustration with the competence of Cairo’s new leaders, (Muslim Brotherhood) the Qatari finance minister, Youssef Kamal, said a month ago that no new aid for Egypt was imminent.

Egypt’s public finances have deteriorated significantly since the revolution which began an era of political turmoil. Foreign currency reserves have fallen 63 per cent, from $36bn, before the uprising to $13.4bn at the end of March. The country’s budget deficit is widening and its credit rating continues to drop.

The government of Mohamed Morsi, the president, has been trying to secure a $4.8bn loan from the International Monetary Fund as well as financial aid from other oil-rich Arab countries. The loan would unlock budget support and aid from other countries and international organizations.

However, many commentators doubted over Qatar’s intentions to give aid to Egypt, with the public minds see Doha’s support as suspicious outside meddling in the affairs of other states.