By: Amr Fouad

Cairo – Mubasher: The recent arrival of $6 billion in fresh Gulf aid will be reflected positively on Egypt’s economic indices, which have begun to see a recovery, according to economic expert Mohsen Adel.

On Wednesday, Egypt’s foreign reserves received $6 billion in deposits from three Gulf States – the UAE, Saudi Arabia and Kuwait – at an interest rate of 2.5%, to be paid after three to five years, said Hisham Ramez, governor of the Central Bank of Egypt (CBE).

The three oil-rich Gulf countries pledged during last month’s economic summit in Sharm El-Sheikh to support Egypt’s fledgling economy with a total of $12 billion in the form of investments, assistance and CBE deposits.

The assistance aims to boost the CBE’s foreign reserves, which are expected to exceed $21 billion in April, said a member of the country’s economic development council, affiliated with the presidency.

Earlier this month, the CBE said that net international reserves fell from $15.455 billion by the end of February to $15.29 billion by the end of March, a decline of $165 million or 1.07%.

Egypt’s government has largely depended on the billions in Gulf aid that began arriving after the July 2013 ouster of president Mohamed Mursi. The economic conference, originally called for by Saudi Arabia after Mursi’s removal, brought in $36.2 billion in investments, in addition to the renewed Gulf pledges.

Mohsen Adel, who doubles as CEO of Pioneers Holding and is a board member at the Egyptian Stock Exchange (EGX), also said that the rise in foreign currency liquidity is likely to bolster the CBE’s attempts to eradicate the currency black market entirely.

Earlier this year, the central bank purposefully began devaluing the Egyptian pound with regards to the US dollar in an effort to wipe out black market exchanges.

Adel said that having foreign currency supplies through Gulf assistance will help Egypt achieve its economic targets through executing revenue-generating projects that will be beneficial to the Egyptian people.

Moreover, the recent assistance is likely to raise the Egyptian economy’s credit rating, Adel noted.

Earlier in April, Moody’s Investor Service said it raised Egypt’s credit rating to B3 with an outlook of ‘Stable’.

Translated by: Nada Adel Sobhi