Saudi Arabia and the United Arab Emirates (UAE) plan to renew their deposits with the Central Bank of Egypt (CBE) that amount to more than $10bn and are due next year, sources close to the matter told Daily News Egypt on Saturday.
The sources, who requested anonymity, said that the deposits are short-term and include about $5bn from Saudi Arabia and $5bn from the UAE. They said that an agreement has been reached between the two Gulf countries and Egypt to extend the deposits.
The sources added that the renewal of the deposits comes at a time when Egypt faces a shortage of foreign currency liquidity and a rise in its external obligations. It also comes ahead of the completion of the International Monetary Fund (IMF) review.
According to the CBE, Arab countries have deposited about $29.9bn in the bank, of which $15bn are medium- and long-term deposits from the Gulf states, and $14.9bn are deposits from the Gulf states and Libya.
The UAE deposits in the CBE total about $10.7bn, divided between $5.7bn long-term and $5bn short-term, while Qatar has deposited about $4bn, Saudi Arabia has deposited about $10.3bn, and Libya has deposited about $900m.
The CBE also reported that net international reserves increased to $34.97bn by the end of September 2023.
A report by Morgan Stanley last week suggested that the UAE will extend the loan term, as the Gulf Cooperation Council (GCC) countries are willing to do so. The report also said that the GCC countries’ support is crucial for the current IMF program, especially in ensuring that financing needs are met adequately.
The report indicated that the nature of Egypt’s support from direct deposits and joint loans has shifted to commercial deals or asset sales. However, the report expected that some deposits would be renewed or converted into direct investments.
The Qatar Investment Authority is currently looking at several Egyptian companies to invest in, including the government’s stake in Vodafone Egypt. Qatar also expressed its interest in investing in some Egyptian ports. A previous Bloomberg report stated that Qatar deposited $1bn in the CBE to finalize these deals.