The Arab Monetary Fund (AMF) said on Sunday it was arranging a US$65 million credit facility for Egypt to help the country trade with other Arab states, as political instability threatens Cairo with a balance of payments crisis.
The credit line will be extended through a trade financing program run by the AMF, central banks and other financial institutions in the region, said the AMF, a multilateral lending body with 22 member countries, Reuters reported.
Egypt’s balance of payments deficit ballooned to US$11 billion in the first nine months of its 2011-2012 fiscal year, more than double year-ago levels, as inflows of capital largely dried up.
Cairo is seeking aid from a wide range of international donors; Egyptian officials said in February they had asked for US$500 million each from the AMF and the African Development Bank, US$1 billion from the World Bank and US$660 million from the European Union. But aid has generally been slow to arrive, partly because donors have been cautious about lending while Egypt’s political outlook remains unclear.
Farouk el-Okdah, Central Bank of Egypt’s governor, said at a meeting of AMF and regional central bank officials in Abu Dhabi on Sunday that the capital and revenues of Egyptian commercial banks were strong. “We are in a better position now,” he said without giving figures.
