Egypt expects $6 billion in Central Bank deposits within days

Egypt expects to receive US$6 billion in Central Bank deposits from Gulf countries within the coming 10 days, the bank’s governor announced Tuesday.

At the Egypt Economic Development Conference in March, the United Arab Emirates pledged to make a $2 billion deposit at the Central Bank, while Saudi Arabia promised a $1 billion deposit. Together with Kuwait and Oman, these countries also pledged an additional $9.5 billion in unspecified grants and investments.

The terms of the deals were not made public at the time, but Central Bank governor Hisham Ramez told state news agency MENA the upcoming $6 billion in deposits would be for three to five years.

Since the overthrow of former President Mohamed Morsi, Egypt has been highly dependent on grants from its allies in the Gulf to keep its economy afloat. After a surge of grants early in the 2013-14 fiscal year, aid has fallen off, driving a widening balance between a payments deficit as well as a budget deficit, and contributing to a decline in foreign reserves below the critical level of three months of import coverage.

In September 2014, the country also returned $2 billion in Central Bank deposits made by Qatar, with whom relations have soured since the current government came to power.

The delivery of the announced deposits from Gulf countries, along with other aid and investment pledged in March, should help push Egypt back to 2013/14 levels.