Libya thrusts $2 billion in Egypt

egypt-tourismEgypt’s Central Bank has received a deposit of $2 billion from Libya. The amount is reported to come from the Libyan investments in Egypt. Questioned about the reasons behind such a move, the Libyan Central Bank governor highlighted that the stakes it has in the country oblige it to lend a hand. Libya’s stakes in Egypt are close to $10billion.
Governor Saddeq Omar Elkabber said the $2 billion is “not a loan” but a Central Bank deposit, without elaborating any further. However, the governor said that the country’s “stability is important for Libya” because of the billions of dollars it has invested “in banks, property and other sectors.” He compared the deposits made by Libya to the actions taken by the European Union to save some of its members from economic crisis. According to Governor Saddeq, “this is like when the European Union helped Greece.”
Libyan Prime Minister Ali Zeidan minimized the importance of the decision saying that the Libyan Central Bank “was free to make deposits where it chose”. He added that “there was no loan” to Egypt. This makes the $2 billion deposit different from the $2 billion five-year interest free loan with a three year grace period, agreed upon during the past week. An official from Egypt’s finance ministry was quoted saying that the reported interest free loan will be used “to support the Egyptian economy and the state budget and foreign currency reserves”.
In the past few months, Libya has been intensifying its bilateral relations and cooperation with Egypt. Several agreements especially under the domain of finance and energy have been of interest to both countries. Libya’s support is contributing towards easing the pressure being exerted on the Egyptian government.

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