Will UAE's $35B investment help Egypt recover from financial crisis?
The Gulf state has stepped in with a major deal that could throw an economic lifeline to President Abdel Fattah al-Sisi's government.
CAIRO — Two weeks after Egypt struck a historic investment deal with the United Arab Emirates, the Central Bank of Egypt let the local currency float freely on Wednesday and announced that the International Monetary Fund had agreed to increase its bailout loan from $3 billion to $8 billion.
The Central Bank also raised interest rates by 6% this week as a part of a set of comprehensive economic reforms led by the government, the bank’s Monetary Policy Committee said in a statement.
The latest measures come after Egypt and the UAE signed a deal last month worth billions of dollars to develop the Ras el-Hekma area on Egypt’s Mediterranean coast. The UAE offer to pump $35 billion in foreign direct investments into Egypt's economy within two months was a lifeline for the North African country's struggling economy.
The upfront case offered a quick respite in Egypt's foreign currency shortage, which has curbed local business activity, caused delays at ports and slowed payments for some commodities. The government announced last week that it had already received $10 billion of the UAE's investment in two separate payments.
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