Egypt to Return $1bln Deposit to Qatar in Two Months – Official

The Central Bank of Egypt (CBE) Governor Hisham Ramez said on Tuesday Egypt will return US$1 billion deposit to Qatar within the coming two months. He added that this amount is divided into two deposits worth US$500 million each and that Doha refused to renew their maturity after they came due.

The first deposit (US$ 500 million) will be return on November 3, 2013; while the second (US$ 500 million) will be returned on December 3, 2013, Youm7 gazette quoted the top official further as saying.

The one-year term deposits had been sent to the central bank late last week, Ramez clarified.

On September 19th, Ramez announced that Egypt returned US$2 billion that Qatar had deposited with its central bank, after talks to convert the funds into three-year bonds broke down.

Egypt authorities have also refused a Qatari request to increase the number of flights between the two states, according to Egyptian airport sources, in a further sign of rising tension between the two Arab Muslim states.

Cairo’s relations with Qatar deteriorated after the Egyptian army deposed Islamist President Mohamed Morsi on July 3. Qatar had been a firm backer of Morsi’s Muslim Brotherhood and lent or gave Egypt US$7.5 billion during the year he was in power.

Qatar had sent Egypt US$3 billion in May, of which it converted US$1 billion into three-year bonds.

Ramez told Reuters in a telephone interview that the Qatari authorities had agreed to convert the entire remaining US$2 billion but then changed their minds.
“They wanted to postpone it, then they said they would do it like they announced last time, and then they came back with some amendments, doing part and postponing the other part for a time, which we found not suitable for us,” he said. “So we just repaid the deposit.”

On July 1, Egypt converted the US$1 billion into three-year bonds at 3.5 percent interest and in May it converted another US$2.5 billion of Qatari loans into 18-month bonds at 4.25 percent interest. The bonds were listed on the Irish stock exchange.

Since Morsi’s ouster, Saudi Arabia, Kuwait and the United Arab Emirates have pledged Egypt US$12 billion in grants and interest-free loans.