Interpreting Middle East Economic News and Analyzing Market Trends

Qatar says no more aid to Egypt, IMF loan still on hold, expect pound to resume decline

Last December, Qatar injected $2.5 billion ($500 million of which was gifted) into Egypt to support the pound as foreign currency reserves dried up.  Qatar has been actively helping Egypt since the revolution in 2011.  To date, Qatar has given $5 billion in aid to the country.  According to Reuters, Qatar will not give Egypt any more aid for the time being.

With Egypt’s sugar-daddy taking time off for now, who will step in to help?  The IMF is eager to give Egypt $4.8 billion in aid (with many strings attached), who else will come to the rescue?

Chart forUSD/EGP (USDEGP=X)

 

Since the beginning of the year, the Egyptian pound has depreciated 11% against the US dollar.  With fresh foreign cash on hold, expect the pound to resume its decline.  We will update you further as the pound declines, but in the meantime, read our earlier posts on Egypt:

Egypt’s shrinking foreign currency reserves, devaluation is inevitable

Egypt is being strong-armed into accepting IMF loan