Egypt receives first Qatar instalment of $2 billion aid

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Egypt has received its first instalment of $2 billion of financial support from Qatar, the country’s finance minister announced on Thursday.

“$500 million have been paid into the Finance Ministry’s account via the Central Bank [of Egypt],” Egypt’s official MENA news agency quoted Finance Minister Mumtaz al-Said as saying.

The minister said Qatar would pay the remaining funds in September, recalling that the Gulf state had also given Egypt an additional $500 million in October last year.

Egypt, which is facing serious economic challenges, was handed a $4.8 billion loan by the International Monetary Fund, during a visit by director Christine Lagarde to Cairo on Wednesday.

The IMF, for its part, stressed the need for a reform programme to deal with the country’s economic crisis.

The meeting with Lagarde sent a “signal to investors… of a revival for the Egyptian economy,” said the minister.

Qatar’s decision to give $2 billion in financial aid to Egypt followed a recent meeting in Cairo between President Mohamed Morsi and Qatar’s Emir Sheikh Hamad bin Khalifa Al-Thani.

The Egyptian central bank’s reserves have fallen sharply since the ouster of President Hosni Mubarak in February 2011. Reserves are at $14.4 billion, against $36 billion a year and a half ago.

The cash shortfall raises fears about Egypt’s ability to maintain imports of basic commodities such as wheat and refined fuel and to honor its international financial commitments.

Egypt has also seen tourism and foreign investment drop off amid its political turmoil.

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