CAIRO- Egypt anounced that it has returned $2 billion to Qatar because of the harsh credit terms.
A senior offical at the Egypt Finance Ministry told an AA correspondent Doha wanted to convert bank deposits into bonds, which was not in the contract and would put in place harsh conditions benefiting Qatar National Bank, after failing to reach a deal. He said Cairo decided to refuse the fund because of these conditions.
The official said Qatar wanted 5% interest rate and a repayment period of one year. Until the revolution on June 25, 2011 in Egypt, Qatar had sent $8 billion in aid, demanding 5.5 of it be converted into bonds.
The Egyptian goverment has spent $2.5 billion of the $3.5 billion in 18 months at an interest rate of 4.25%, while 1 billion dollars of the remainder must be repaid after 36 months. The 2 billion dollars which was sent recently sent to Egypt was returned to Qatar because of the one year repayment period and 5% interest rate.
An official said the decision was reached due to funds from Saudi Arabia, the United Arab Emirates and Kuwait worth $12 billion which alleviated the need.
An official source at the Ministry of Finance said the ministry respected the Egyptian goverment’s decision to return the $2 billion deposit.
According to Qatar Official Agency KUNA, the conversion of deposits into bonds took two weeks following exchange deals between the Egypt National Bank and Qatar.
