Egypt to repay $2.5 billion Qatari deposit by end of November

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Egypt will repay a $2.5 billion USD deposit to Qatar at the end of November, bringing the total amount of deposits it has returned to the Gulf Arab gas exporter to $6 billion since last year’s ouster of Islamist president Mohamed Morsi, a central bank source told Reuters on Thursday.

Qatar had helped prop up the Egyptian economy in the aftermath of the 2011 uprising that overthrew Hosni Mubarak and eventually brought Morsi and his Muslim Brotherhood to power in the country’s first democratic elections.

The tiny Gulf state, a supporter of the Brotherhood, provided Morsi’s government with billions of dollars in deposits, grants and energy supplies during his year in power.

But Egypt’s relations with Qatar have soured since Morsi’s ouster in July 2013 following protests against his rule.

Egypt repaid a $500 million deposit in October and has another $500 million outstanding, which is due to be repaid in the second half of 2015, the source told Reuters.

“Qatar made a formal request in the last few days for the return of an outstanding deposit of $2.5 billion and the central bank will return the deposit at the end of November,” the source said, speaking on condition of anonymity.

Since Morsi’s ouster, Egypt has relied on support from Saudi Arabia, the United Arab Emirates and Kuwait, which see the Brotherhood as a threat.

An Egyptian government source told Reuters on Thursday that Cairo had received earlier in the week a $1 billion grant from Kuwait, the latest in billions of dollars of aid to arrive from Gulf Arab allies since Morsi’s removal.

Egypt has been hit by more than three years of political and economic turmoil following the 2011 uprising.

The government is trying to strike a balance between cutting its deficit while reviving economic growth, which at 2.2 per cent in the 2013/14 fiscal year remains too slow to create enough jobs for a youthful population of 86 million.

In an effort to ease the burden on its swelling budget deficit and minimise its need for Gulf aid, Egypt’s government has introduced a raft of long-delayed reforms in recent months including subsidy cuts and tax hikes.