Created on Sunday, 13 January 2013 08:24
Written by Abdel Latif Wahba / Tarek El-Tablawy - bloomberg
Qatar said it doubled its deposits at Egypt’s central bank to $4 billion, helping ease a currency crisis as the Arab world’s most populous country waits to resume loan talks with the International Monetary Fund.
Qatari premier Sheik Hamad bin Jassim al-Thani said those funds have been transferred, and $500 million of new grants also delivered to Egypt. “We don’t announce except after doing,” he said. The comments came as the Egyptian pound extended its decline today, falling 0.6 percent at 5 p.m. in Cairo. It has dropped almost 5 percent in two weeks.
Egypt has struggled to revive economic growth as political turmoil persisted after the 2011 revolution that overthrew Hosni Mubarak. The government says the $4.8 billion loan it is negotiating with the IMF will help by encouraging more investment. A Fund team is due to return to Cairo in two or three weeks to resume talks, President Mohamed Mursi’s spokesman Yasser Ali said today.
Mursi’s Islamist government may find it hard to make IMF- backed budget savings measures ahead of parliamentary elections later in the year. Such cuts may cost it backing among a population increasingly impatient with the lack of economic progress and security.
The central bank has been rationing foreign exchange via auctions to help shield its reserves, after spending almost 60 percent of them since the revolution. It offered $60 million in today’s sale.
Egypt had signed a preliminary deal with the IMF only to delay the request as political turmoil escalated last month. Mursi also backtracked on a proposal to increase taxes that had been linked to the IMF-backed plan. Egypt’s budget deficit is projected to widen to 11.4 percent in the fiscal year ending in June, from 11.2 percent, and the Fund has called for savings.
Protests swelled against Mursi’s decree in November placing his decisions above court review, and his support for a draft constitution that opponents said bolstered Islamic law at the expense of protecting freedoms, and didn’t represent the whole nation.
The charter was approved with 64 percent backing in a referendum last month, though about seven out of 10 eligible voters abstained.
The only woman to have served on the Supreme Constitutional Court, Tahani el-Gebali, said today she had filed a case challenging the legitimacy of the constitution, the state-run Middle East News Agency reported.
She is also seeking to nullify decisions linked to the new charter, including the reduction of the number of justices serving on the country’s highest court to 10, a move that cost el-Gebali her seat, MENA reported. El-Gebali had been sharply criticized by Islamists both before and after Mursi’s election.