Sunday, August 12, 2012

Qatar Grants $2 billion Loan To support Egyptian economy

Qatar pledged $2 billion to be deposited in  Egyptian Central Bank  help support the new president effort in turning around the economy of Egypt battered by  political turmoil.

Egypt economy that is currently facing a balance of payments crisis and high state borrowing costs, urgently needs financial aid to avoid currency devaluation.

Egypt presidency statement said."The state of Qatar has decided to deposit $2 billion at the Egyptian Central Bank,"

The emir of  Qatar, Hamad bin Khalifa al-Thani, on his visit to Egypt on Saturdy, held talks with newly elected Islamist President Mohamed Mursi

Political unrest has chased away tourists and foreign investors and prompted government employees to strike for higher wages.

The International Monetary Fund (IMF) is expected to arrive in Cairo this month to resume talks with the government over a $3.2 billion loan.

Egyptian government expects a growth rate of 3.5-4 percent in the 2012-2013 fiscal year.

If new may opt for  austerity measures to help stabilize government finances and secure foreign financial help. On this ground IMF may consider granting Egypt loan.
 Meanwhile, Egypt has just cancelled the Constitutional amendment that gave the military wide power to do as it deem fit. In line with democratic change, this will go along way to strengthen democratic governance.

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