Egypt seeks $2 bln in loans from Algerian government

Egypt seeks $2 bln in loans from Algerian government

CAIRO - Reuters
Egypt seeks $2 bln in loans from Algerian government

An Egyptian vendor waits for clients in Cairo, Egypt. The Arab nation is seeking international support to overcome its budget and current account gap. AP photo

Egypt’s government will discuss gaining assistance worth $2 billion from Algeria during a visit to the country by Prime Minister Hisham Kandil yesterday, an Egyptian newspaper reported, citing an unnamed official.

Egypt needs help from foreign donors to rein in its budget deficit and avert a balance of payments crisis until it can secure a $4.8 billion loan from the International Monetary Fund.

Two official sources confirmed to Reuters that Cairo was seeking aid from the fellow north African state although they said it was not clear what form the assistance would take. One said the amount in question was around $2 billion.

Newspaper al-Masry al-Youm did not give a direct quote from its source, but wrote that: “An official source said that Egypt will negotiate a deposit worth $2 billion to be put in the central bank and that negotiations that prime minister Hisham Kandil will do today [yesterday] with Algerian prime minister Abdelmalek Sellal will involve this subject.”

It gave no indication if the money was to be a loan or some form of grant, or of any conditions attached.

Transfers from Saudi Arabia and Qatar since June have helped shore up state finances weakened by more than a year of economic turmoil since the overthrow of Hosni Mubarak in February 2011.
Turkey is also set to loan $1 billion to Egypt, according to officials, half of which will be paid by the end of this year.

Strong demand for natural gas and relatively high world energy prices have helped Algeria add this year to a foreign exchange reserve pile that was worth more than $186 billion at the end of June.