Saudi Arabia has deposited $5 billion in Egypt’s central bank, according to the Saudi state news agency, and the kingdom is poised to spend more as the Ukraine crisis adds to the country’s economic pressures.
Egypt said last week that it was in negotiations with the International Monetary Fund for possible cash and technical assistance to mitigate the economic impact of the Russia-Ukraine situation.
Additional donor funding is frequently required in order to get IMF financing.
“The Kingdom of Saudi Arabia deposited five billion dollars with the Central Bank of Egypt to carry out the directions of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud and His Highness the Crown Prince,” the Saudi Press Agency said on Wednesday.
Furthermore, an Egyptian cabinet statement on Wednesday stated that Saudi Arabia’s state-owned Public Investment Fund (PIF) will invest extra cash in the country, through Egypt central bank, but provided little details.
According to Egyptian Prime Minister Moustafa Madbouly, cooperation between the PIF and Egypt’s sovereign fund would include initiatives to attract $10 billion in investments. He promised that a bundle of initiatives will be announced as soon as feasible.
According to the report, Saudi Minister of State for Shura Council Affairs Essam bin Saeed stated that under an agreement reached with the Egyptians, a private investment business will be founded in Egypt.
“The PIF has several options and investments that it will bring to the Egyptian government shortly, whether through Egypt’s sovereign fund or in conjunction with private enterprises,” bin Saeed added.
They would involve investments in education, health, particularly medicine, agriculture, development, and finance, among other areas.
According to an Egyptian cabinet statement, the PIF investments would assist attract foreign currency, boost the employment of local labor, bring in new technology and skills, and improve commerce between Egypt and Saudi Arabia.
Markets throughout the world have been affected by Russia’s invasion of Ukraine at the end of February.
Egypt’s economic devastation is exacerbated by the fact that Ukraine and Russia were its primary wheat suppliers and vacation destinations.
After investors withdrew billions of dollars from Egyptian treasury markets, Egypt depreciated its currency by roughly 14% on March 21.
Saudi Arabia said in October that it had made a $3 billion deposit with Egypt’s central bank and had extended the term of another $2.3 billion in prior deposits. The $10.3 billion deposit disclosed on Wednesday brings the total to $10.3 billion.
According to central bank data, the United Arab Emirates had $5.7 billion in long-term deposits with Egypt’s central bank while Kuwait had $4.0 billion.
Meanwhile, Egypt’s cabinet said on Tuesday that it has secured an agreement with Qatar on $5 billion in investment projects.
