Egypt to get $2b Saudi deposit in IMF deal

Cairo: Egypt has received a $2 billion deposit from Saudi Arabia, an Egyptian central bank official said, bringing it closer to securing a $12 billion loan from the International Monetary Fund.
The official, who asked not to be identified because the information is not public yet, didn’t specify when Egypt received the funds. Net foreign reserves rose by $3 billion in September to $19.6 billion. Officials at Saudi Arabia’s finance ministry and central bank could not immediately be reached for comment outside regular office hours on Wednesday.
Egypt is seeking as much as $6 billion from bilateral creditors to meet the conditions for the IMF’s board to consider the loan, which officials hope will help restore investor confidence and end a foreign-currency shortage. Confirmation of the deposit may help to end speculation that recent tensions between the two countries would prevent the Saudi payment, putting the IMF loan -- and other measures designed to overhaul the economy -- at risk.
The news eases concerns that the political rift “would delay the build up of a foreign-currency buffer necessary to float the Egyptian pound and close the IMF deal," said Hany Farahat, senior economist at CI Capital, a subsidiary of Commercial International Bank, in Cairo. Egypt’s “migration to a managed floating currency regime in the coming weeks is now more feasible," he said.
Saudi support
The Saudi funds “will help boost reserves,” state-run Middle East News Agency reported, citing a central bank official it did not identify. The Market Vectors Egypt exchange-traded-fund gained after the report, rising more than 1 per cent. It fell 0.1 per cent at the close in New York.