UAE To Give Egypt $3BN In Loans, Grant

The United Arab Emirates has agreed to grant Egypt $1 billion and lend it another $2 billion, an Egyptian source said on Tuesday, throwing it a financial lifeline after the army ousted the country’s Islamist president last week.

The source also said Saudi Arabia may lend Egypt another $2 billion, which he expected to be confirmed within two days.

Egypt’s finances have been devastated by political and economic instability since the popular uprising that pushed Hosni Mubarak out of the presidency two and a half years ago.

The UAE’s $3 billion was expected to be part of a larger financial package from the Gulf emirate, said the source close to the talks. The loan would be in the form of a deposit at Egypt’s central bank, although the interest rate and maturity had yet to be finalised.

UAE Foreign Minister Sheikh Abdullah bin Zayed and National Security Adviser Sheikh Hazza bin Zayed flew to Cairo on Tuesday morning at the head of the most senior foreign delegation to visit Egypt since the overthrow on Wednesday of Mohamed Mursi.

He became president a year ago in Egypt’s first freely contested election.

The delegation was coming to “show full support to the people of Egypt – political support, economic support,” Egypt’s foreign ministry spokesman Badr Abdelatty said earlier.

Egypt has run through more than $20 billion in reserves, borrowed billions from abroad and delayed payments to oil companies in order to support the pound since the 2011 uprising drove away tourists and foreign investors, two of its main sources of foreign currency.

Source: Reuters