Qatar’s sovereign wealth fund, QIA, has deposited $1 billion with Egypt’s central bank as part of a deal to buy stakes in the country's major firms, Bloomberg reported on Wednesday. 

"Due diligence on the assets and finalising a deal may take time so the QIA made the deposit to help Egypt to shore up its finances in the interim," Bloomberg reported citing people with knowledge of the matter.

The Qatari sovereign wealth fund oversees an estimated $445 billion in assets. Qatar also deposited $3 billion into Egypt’s central bank earlier this year.

The pandemic played a crucial role in tanking Egypt’s economy, which was heavily dependent on tourism among many other sectors. Inflation in the country has been spiraling.

The latest reading in September 2022 saw inflation hit 15%.

In the last week of October, the IMF agreed a $3 billion Extended Fund Facility (EFF) over 46 months with Egypt.

According to Bloomberg, QIA could invest $2.5 billion in Egypt and may buy 20% stake in Vodafone Egypt.

On Wednesday, Fitch Ratings has downgraded its outlook for Egypt saying weaker external liquidity and reduced prospects for access to bond markets leave it vulnerable to global shocks.

(Writing by Seban Scaria seban.scaria@lseg.com; editing by Anoop Menon)