Kuwait to transfer $2 billion aid to Egypt

Egypt will also receive oil products and a $1 billion grant from Kuwait.

The Gulf Arab State of Kuwait will deposit two billion dollars aid it promised Egypt in the country’s Central Bank next week, the bank’s Governor said on Wednesday.

Hisham Ramez told the Al Arabiya television network the money would be left with the country’s apex bank for five years.

A political crisis that began when the Army overthrew Islamist President Mohamed Morsi on July 3 has affected Egypt’s economy whose foreign exchange position has fallen seriously affecting imports especially wheat, the country’s staple food..

In July, Kuwait pledged to provide four billion dollars in aid to Egypt, matching pledges by Saudi Arabia and the United Arab Emirates that showed Gulf Arab approval of the Egyptian army’s ousting of Morsi.

Kuwait’s state news agency said the package would comprise of a two billion dollar central bank deposit, a one billion dollar grant and one billion dollar in oil products.

Kuwait had in the past cooperated with Riyadh and Abu Dhabi in offering financial aid to Gulf neighbours hit by social unrest such as Bahrain and Oman, as well as Morocco and Jordan.

Gulf Arab states viewed Morsi’s Muslim Brotherhood movement rise with deep suspicion.

The aid from the three Gulf Arab oil producers is expected to help Egypt avoid a balance of payments crisis and overcome fuel shortages that partly caused a wave of public anger against Mr. Morsi.

It will also ease pressure on Cairo to conclude long-running talks with the International Monetary Fund for a 4.8 billion dollar loan.

However, a surging fiscal gap will remain a pressing challenge for the Egyptian government, analysts said.

(Reuters/NAN)