Interpreting Middle East Economic News and Analyzing Market Trends

Libya considers giving aid to Egypt

Now here’s a story you would have never expected to see before 2011.  Here’s the article from the Voice of America:

 

Libya is considering extending financial aid to Egypt to help its North African neighbor overcome a severe economic crisis, Libyan Prime Minister Ali Zaidan said on Wednesday.

Egypt, which has endured more than two years of political instability since the overthrow of President Hosni Mubarak in 2011, is struggling with sliding currency reserves, falling tourism and a soaring budget deficit.

OPEC-producer Libya is itself rebuilding after the overthrow of Moammar Gadhafi in 2011.

Several newspapers had reported this week that Libya will deposit $2 billion at Egypt’s central bank to support the economy but Zaidan said nothing had been decided yet.

“It has been under consultation; this issue has not been decided yet,” Zaidan told reporters in the Qatari capital Doha when asked about the reports. He declined further comment.

A Libyan central bank official also told Reuters that Tripoli with its sovereign wealth fund would continue to look for investment opportunities in Egypt.

“Libya owns stakes in three banks in Egypt and companies in various sectors,” said the official, who declined to be identified. “We will invest whenever these companies need liquidity, debt repayments and capital for operation.”

“Our investments in Egypt are very strategic and we will do what’s needed to support that,” he added. “Egypt’s security and stability are as important to us as our own.”

Earlier, Libya said it would provide Egypt with the equivalent of one million barrels of crude per month at world prices to support the economy, according to Libya’s state news agency.

Link to the article here.

 

Libya is struggling itself to get back on its feet, but I’m sure the new government in Tripoli has its motives for helping out its beighbor.  Lately, all roads in the Middle East seem to lead back to Qatar.  We posted earlier that Qatar has been supporting the Egyptian economy and the Egyptian pound.  However, after dumping billions into Egypt without much success, the Qataris may have told Libya to start helping as well.  After all, Libya is where it is today in part thanks to Qatar.