Egypt Returns $2 Billion To Qatar After Dispute

Egyptian authorities have returned $2 billion that the Qatari government had deposited into its central bank, after two weeks of negotiations failed to bear any fruit on converting the funds into bonds, Reuters reported on Thursday.

Central bank governor Hisham Ramez said that Qatar had initially agreed to convert the sum into three-year bonds, but changed their minds at the last minute.

Egyptian authorities have returned $2 billion that the Qatari government had deposited into its central bank, after two weeks of negotiations failed to bear any fruit on converting the funds into bonds, Reuters reported on Thursday.

Central bank governor Hisham Ramez said that Qatar had initially agreed to convert the sum into three-year bonds, but changed their minds at the last minute.

[quote]”They wanted to postpone it, then they said they would do it like they announced last time, and then they came back with some amendments, doing part and postponing the other part for a time, which we found not suitable for us,” Ramez told Reuters in a telephone interview, adding, “so we just repaid the deposit.”[/quote]

A Qatari finance ministry spokesman told AFP that Doha “respected” Cairo’s decision, but said that negotiations had only failed because Egypt had asked for the full amount to be changed into bonds at one-go while Qatar wanted this to be done in stages.

Reuters noted that Egyptian authorities had on Thursday also refused a Qatari request to increase the number of flights between the two states, “in reaction to the recent escalations between Egypt and Qatar.”

Cairo-Doha relations have been strained ever since the Egyptian army deposed Islamist President Mohamed Mursi on July 3. Qatar had been a firm backer of Mursi’s Muslim Brotherhood and lent or gave Egypt $7.5 billion during the year he was in power.

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Qatar last month also condemned an attack by Egyptian security forces on Muslim Brotherhood supporters camps in Cairo, in which hundreds were killed while asking for the release of jailed Muslim Brotherhood leaders. According to Reuters, at least 2,000 Islamist activists, mostly from the Brotherhood, have also been arrested in the past two months in Egypt.

Additionally, Egyptian authorities recently closed the Cairo offices of Qatar’s Al Jazeera news channel, accusing it of siding with Mursi. Two Al Jazeera journalists have been detained for over a month.