CBE denies receiving billion-dollar Kuwaiti deposit

After news circulated of Kuwait sending a US$1 billion grant to Egypt, on Friday a Central Bank of Egypt (CBE) source told the privately owned newspaper Al-Masry Al-Youm (AMAY) that the bank didn't receive any Kuwaiti money. 

Last Sunday, several media sources, such as the Saudi and London-based outlet Al-Quds Al-Arabi, reported that Kuwait transferred a US$1 billion grant to Egypt, citing an anonymous source from the Kuwaiti Ministry of Finance. The grant was Kuwait’s last payment to Egypt as part of its commitment to support the country in the aftermath of the end of the Muslim Brotherhood rule last year, the newspaper reported.

The ministry source confirmed that the CBE received the payment. 

However, a source from the Central Bank of Egypt denied Kuwaiti reports that the grant had been transferred to the central bank. 

"The Central Bank of Egypt didn't receive any Kuwaiti grants since they were announced," AMAY quoted the source as saying. He added that existing deposits and bonds in the bank from other Arab countries are regulated by agreements, and they include money from Libya, the Emirates, Saudi Arabia and Qatar. 

Before this grant controversy rose, Egypt had already received US$3 billion from Kuwait since last July. Of that amount, US$2 billion was offered as loan deposits to be repaid to Kuwait, while US$1 billion was offered in the form of a grant subsidizing oil products. Gulf Arab support to Egypt since last year has now reached a total US$13.8 billion, according to Gulf sources. In May, Saudi Arabia, Kuwait and the Emirates pledged another US$20 billion to Egypt.

While Gulf support to Egypt in the last year has been described as necessary for the country’s recovery from its dire energy and public finance crises, it was often criticized for not being a sustainable economic solution — especially because it is directly channeled to the national budget, as opposed to investment projects.

Gulf funding to Egypt is also largely seen as a form of political support for President Abdel Fattah al-Sisi’s administration, which is a major ally to Saudi Arabia in the region.