0652 GMT September 26, 2022
The government is in talks with regional and international banks about the details of the financing, the people said, asking not to be identified because the talks are private. Discussions are preliminary and may not result in a deal, they said, Bloomberg reported.
Egypt government officials said they had no information on the issue.
Urgency is building for Egypt’s $400 billion economy to secure more foreign currency as it seeks to plug gaping deficits. Soaring oil and commodity prices have hit one of the world’s largest wheat importers hard, as has the loss of tourists from Russia and Ukraine. The conflict has put pressure on Egypt’s currency and prompted it to seek International Monetary Fund assistance.
As the cascade of side effects spread, Egypt is seeking to garner $41 billion to pay for its current account deficit and maturing debt by end of 2023.
Financing from the Persian Gulf is providing a crucial backstop to Egypt as it looks stabilize finances. Saudi Arabia, the United Arab Emirates and Qatar have pledged more than $22 billion in deposits and investments in the struggling economy.
Earlier this week, a unit of Saudi Arabia’s sovereign wealth fund scooped up state-owned stakes in four Egyptian publicly listed companies for $1.3 billion, as part of the kingdom’s commitment to channel resources.
First Abu Dhabi Bank and Abu Dhabi Commercial Bank are leading the loan and have invited other banks to participate, the people said. The borrowing is expected to be priced at around 400 basis points over the three-month secured overnight financing rate, according to two of the people.