Egypt gets US$1bn from Saudis; clearing IMF hurdle

Saudi Arabia has transferred US$1bn to Egypt's central bank, an Egyptian minister said on Thursday, in a move seen as helping Cairo secure a US$3.2bn loan from the IMF. Egypt has asked the International Monetary Fund (IMF) and other donors for loans to help it plug a balance of payments deficit aggravated by the political and economic turmoil of the last 15 months. Last year's uprising chased away tourists and foreign investors, two of Egypt's main sources of foreign currency, and economists say the country will need a minimum of US$11bn over the next year to stave off a balance of payments crisis and a potential devaluation of its currency. Before it agrees to the loan, the IMF has told Egypt to come up with an economic programme that has broad domestic political support and to line up additional resources from international donors. In a statement, Planning Minister Faiza Abu el-Naga said the Saudi funds had been deposited with the central bank for eight years and that "coordination was ongoing" with Saudi Arabia about remaining elements of a US$2.7bn aid package first broached with Riyadh a year ago. The Saudi package also includes US$500m of support for development projects, US$250m to finance purchases of petroleum products and US$200m of support for small-and medium-sized enterprises. An Egyptian official said last month Saudi Arabia had agreed to transfer all the funds by the end of April. But a week later Riyadh recalled its ambassador in a rare diplomatic row over street protests in Cairo against the arrest of an Egyptian lawyer in Saudi Arabia. A year ago, Egypt said Saudi Arabia and other Gulf Arab states had pledged billions of dollars in support, but only just US$1bn actually arrived at the time, with Saudi Arabia and Qatar sending US$500m each.