Saudi Arabia, UAE approve financial aid to Egypt

PanARMENIAN.Net - Saudi Arabia approved $5 billion in aid to Egypt on Tuesday, July 9 and the United Arab Emirates has offered $3 billion in desperately needed support for the economy after the army ousted the Islamist president last week, Reuters reported.

The Saudi funds comprise a $2 billion central bank deposit, $2 billion in energy products, and $1 billion in cash, the Saudi Finance Minister Ibrahim Alassaf said.

Egypt has struggled to pay for imports since the 2011 uprising that pushed Hosni Mubarak out of the presidency drove away tourists and foreign investors, two of its main sources of foreign currency.

Since then it has run through more than $20 billion in reserves, borrowed billions from abroad and delayed payments to oil companies.

The United Arab Emirates will make a $1 billion grant to Egypt and a $2 billion loan, state news agency WAM said on Tuesday. The $2 billion loan would take the form of an interest-free deposit with Egypt's central bank, WAM said.

The UAE's $3 billion was expected to be part of a larger financial package from the Gulf emirate, the Egyptian source said.

Economists warn that the aid will be of only short-term value if Egypt does not use it to overhaul its finances.