The UAE has offered a financial deposit of $1bn to the Central Bank of Egypt, according to UAE news agency WAM.

The $1bn cash deposit has been offered to Egypt for a period of six years as the UAE continues its “unwavering stand in support of Egypt and its people”, said the statement on WAM.

The UAE has been a big supporter of the current government and has offered a number of financial aid and investment packages to Egypt since President Abdul Fatah al-Sisi came to power in 2014.

During the Egypt Economic Development Conference in March last year, the UAE pledged $4bn to the North African country.

A declining tourism sector and limited foreign direct investments has made Egypt’s economic recovery difficult. Cairo is also battling a shortage foreign currency as its foreign exchange crisis stretches into its third year.

Egypt’s real GDP is forecast to expand by 3.3 per cent in 2016 despite 4.2 per cent growth in 2015, according to the IMF’s 2016 World Economic Outlook.

The country’s current account deficit is also expected to widen by 5.3 per cent, from 3.7 per cent in 2015 says the Washington-based International Monetary Fund (IMF). The widening of the current account deficit was exacerbated by a 14 per cent devaluation of the Egyptian Pound earlier this year.

Earlier this month Cairo and the IMF reached a staff level agreement for a $12bn loan. The conditions of the loan are likely to put pressure on Egyptian policymakers to press ahead with fiscal and wide-ranging economic reforms.

Egypt has already applied a second round of fuel subsidy cuts and more recently prime minister Sherif Ismail confirmed that the country is set to impose a 14 per cent value added tax (VAT).