Egypt Considers Raising $2.5 Billion as Economic Pressure Builds

If you sign up for our newsletter, you'll get the latest news on the region.

People with knowledge of the plans say Egypt is considering raising a loan of about $2.5 billion.

The people asked not to be identified because the talks are private, said that the government is in talks with regional and international banks. They said that discussions may not lead to a deal.

There was no information from the Egypt government.

Egypt's $400 billion economy is in dire need of foreign currency as it tries to plug its huge deficits. One of the world's largest wheat importers has been hard hit by soaring oil and commodity prices. Egypt has sought International Monetary Fund assistance due to the conflict.

Egypt is trying to make up for its current account deficit and maturing debt by the end of the year.

As Egypt's finances look stable, financing from the Gulf is important. More than $22 billion in deposits and investments have been pledged by Saudi Arabia.

As part of the kingdom's commitment to channel resources, a unit of Saudi Arabia's wealth fund bought state-owned stakes in four Egyptian companies.

The people said that First Abu Dhabi Bank PJSC and Abu Dhabi Commercial Bank PJSC are leading the loan. The three-month secured overnight financing rate is expected to be around 400 basis points higher than the borrowing.

Representatives for the two companies wouldn't comment.