Saudi Arabia extends terms of $5 billion in aid to cash-strapped Egypt

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CAIRO — Saudi Arabia agreed on Tuesday to increase the phrases of a $5 billion support bundle to Egypt that took impact in March, Saudi state media stated, in a transfer geared toward bolstering the North African nation’s current take care of the Worldwide Financial Fund.

The state-run Saudi Press Company stated the extension would enable Egypt to open “new financing channels with regional and worldwide organizations” and assist with the completion of a preliminary $3 billion settlement the Center East’s most populous nation reached with the IMF in October.

Saudi Arabia offered no additional particulars on the phrases of the extension, together with its size. Egyptian state media haven’t commented on the announcement.

The Egyptian economic system has been hard-hit by the coronavirus pandemic and the warfare in Ukraine. Egypt is the world’s largest wheat importer, most of which got here from Russia and Ukraine. Within the fallout of the warfare in Japanese Europe, Egypt has struggled to fight surging inflation, which peaked at over 16 p.c in October.

Egypt’s “workers degree settlement” with the IMF final month is ready to final for 46 months and goals to sort out Egypt’s inflation downside and restructure its ailing economic system. The phrases of the preliminary settlement noticed Egypt’s authorities introduce a collection of speedy financial reforms together with a hike in its key rates of interest and a shift in direction of a versatile alternate charge.

Egypt obtained a $12 billion bailout from the IMF in 2016, as President Abdel Fattah el-Sissi’s authorities launched into an bold reform program that noticed costs surge.

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In recent times, regional allies Saudi Arabia and the United Arab Emirates have injected billions of {dollars} into Egypt serving to shore up its economic system battered by years of political turmoil that gripped the nation following the removing of long-time autocrat Hosni Mubarak within the 2011 revolution.

A few third of Egypt’s 104 million residents reside in poverty, in accordance with authorities figures.