CAIRO: Egypt is currently holding negotiations with the United Arab Emirates to obtain an additional grant worth $3 billion, Al-Masry Al-Youm quoted a “high-profile” Egyptian official as saying Thursday.
The cash will be deposited in the Central Bank of Egypt (CBE), the official said, adding that the talks are scheduled to be completed in the upcoming days.
According to the official, part of the deposit will be allocated for repaying a $500 million installment to Qatar as part of its deposit, while the remaining $2 billion will be repaid later.
He added that the UAE deposit will also be used to pay back premiums on Egypt’s external debt to the Paris Club at a value of $700 million.
Earlier in July, the CBE announced that Egypt repaid a $700 million six-month premium on the foreign debt owed to the Paris Club, an informal group of financial officials from 19 of the world’s largest economies. The group provides financial services, including debt restructuring relief and cancellation to indebted countries and their creditors.
Egypt’s net foreign reserves rose by $99 million to $16.83 billion by the end of August, up from $16.73 billion in July, according to CBE’s monthly report.
Egyptian foreign reserves experienced a sharp decline after former President Hosni Mubarak’s resignation in 2011—registering $35.8 billion at the end of December 2010, while revenues from tourism and foreign direct investments—two key sources of hard currency—have been hurt dramatically by political upheaval since 2011.
According to the official, the UAE deposit is aimed at removing pressure from Egypt’s foreign reserves.
Last month, the Gulf state agreed to grant the Egyptian General Petroleum Authority (EGPC) a $9 billion soft loan to provide petroleum products from UAE and other countries, executive head of EGPC Tarek Al-Mullah told Al-Masry Al-Youm.
Saudi Arabia, along with the UAE and Kuwait have pledged Egypt more than $12 billion in cash aid and oil products to boost Egypt’s economy after the ousting of former President Mohamed Morsi in July 2013.