Egypt's currency reserves dip to $17.8 bln in November

Reuters

CAIRO, Dec 8 (Reuters) - Egypt's foreign exchange reservesfell to $17.8 billion in November from $18.6 billion in October,the central bank said, their lowest level since an inflow offunds from Gulf states after the July 3 ouster of IslamistPresident Mohamed Mursi.

The reserves stood at $15 billion in November 2012. Egypt'sforeign exchange reserves, which stood at $36 billion on the eveof the 2011 uprising against former President Hosni Mubarak,have been hit by political turmoil since his downfall.

Egypt returned a $500 million deposit to Qatar in Novemberafter Qatar refused to renew it at its maturity. Qatar haddeposited the funds with the central bank in late 2012.

Relations between the two countries deteriorated after thearmy ousted Islamist President Mohamed Mursi in July followingmass protests against his rule. Qatar had been a firm backer ofMursi's Muslim Brotherhood and lent or gave Egypt $7.5 billionduring the year he was in power.

"It's related to the repaying of the Qatari funds andpossibly the settlement of dues to oil companies. The combinedeffect of both probably added to the drop," said Hany Genena,head of research at financial group Pharos Holding.

The Egyptian government plans to pay $1.5 billion in arrearsto foreign oil companies "in days", Oil Minister Sherif Ismailsaid last week. It also agreed a timetable to pay $3 billion ofthe $6.3 billion it says it owes those companies.

"We expect another drop in December because of the announcedrepayment of funds to foreign oil companies, coupled withcontinued weakness in tourism revenues," Genena said.

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