CAIRO: Egypt paid $500 million back to Qatar on Oct. 1, and will return $2.5 billion in November, Hisham Ramez, head of the Central Bank of Egypt (CBE), told Reuters Saturday.
In September, Al-Shorouq and Al-Masry Al-Youm newspapers reported sources in the Cabinet as saying that Egypt is negotiating a $3 billion grant with the United Arab Emirates to help pay back the country’s debt to Qatar and the Paris Club.
In the year-long rule of deposed President Mohamed Morsi, the Egyptian government borrowed over $7 billion from Qatar. Since Morsi’s ouster, Egypt has been paying back the debt, which should be completely resolved with a November payment of $2.5 billion payment. However, this will likely hit Egypt’s foreign reserves.
The foreign reserves allow the government to purchase basic commodities, such as wheat and petroleum products, and to pay off premiums and interest on foreign debts. Egypt’s net foreign reserves rose by $36 million to $16.87 billion by the end of September, up from $16.83 billion in August, the CBE announced on its official website Oct. 9.
Egyptian relations with Qatar, a major regional supporter of the Muslim Brotherhood, have deteriorated since the July 2013 military ouster of Morsi.
However, Egypt has replaced Qatar’s support with financial aid from other Gulf monarchies, namely Saudi Arabia, the UAE and Kuwait.
Ramez previously said the CBE will pay $1.4 in installments to the Paris Club in 2014. The most recent installment was in July and valued at $700 million.
Egypt owes some $12.7 billion—excluding interest—to the Paris Club as of December 2013, according to a June statement by the club.
The Paris Club is an informal group of financial officials from 19 of the world’s largest economies and provides financial services like debt restructuring relief and debt cancellation to indebted countries.