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10/04/2013 - 16:11hs
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Qatar to loan over US$ 3 billion to Egypt

The Gulf country should transfer the funds through deposits and purchase of country bonds. Other loans had already been announced.



São Paulo – The prime minister of Qatar, Hamad Bin Jassim Bin Jaber Al Thani, announced on Wednesday (10) that his country would loan US$ 3 billion to Egypt. The funds will be transferred through deposits and purchase of Egyptian government bonds. According to information by news agency Reuters, the agreement was announced during a visit of the prime minister of Egypt, Hisham Qandil, to Qatar. In a short statement, Thani said only that Qatar has accepted the purchase of papers by the Egyptian government.

According to the site of Egyptian newspaper Al Ahram, Qatar should also export gas to Egypt, which uses 56% of its own gas production to produce electricity. This demand grows in summer. Negotiations for the import of gas from Qatar began in September last year.

This is not the first Qatari loan to Egypt since dictator Hosni Mubarak resigned due to the Arab Spring protests, in February 2011. In January this year, Qatar had announced it would loan US$ 2 billion and donate another US$ 500 million. The same volumes were transferred to the Egyptians by Qatar in the second half of 2012.

IMF

Egypt is also negotiating a loan from the International Monetary Fund (IMF). A delegation from the institution visited Cairo last week and met with local authorities to negotiate the financing of US$ 4.8 billion. An agreement with the Fund has not yet been announced. The value of the loan may vary, as may the conditions.

In November last year, the Arab country and the IMF came to an agreement to transfer the funds, but Egypt gave up as the country’s counterpart required austerity measures, like greater taxing. Amidst protests, the government suspended the agreement for fear of greater instability due to unpopular measures.

Libya also promised to help Egypt. Last week, the country announced it would send one million barrels of oil a month and loan US$ 1 billion.

With falling foreign currency reserves, Egypt needs foreign financing to pay its bills.

*Translated by Mark Ament

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