CAIRO, April 10 (Reuters) - Libya will give Egypt a $2 billion five-year, interest-free loan under an agreement signed on Wednesday, the Egyptian state news agency MENA reported.
It quoted a finance ministry official as saying the loan would have a three-year grace period and was intended "to support the Egyptian economy and the state budget and foreign currency reserves".
The official said the money was expected to arrive next week. Earlier in the day, Qatar agreed to give Egypt $3 billion more in aid by buying Egyptian government bonds.
That agreement was announced during a visit to Doha by Egyptian Prime Minister Hisham Kandil.
Both deals came as Egypt is in the midst of negotiations with an International Monetary Fund delegation for a $4.8 billion loan which, unlike the Arab aid, would come with policy conditions including reform of subsidies and tax increases.
MENA quoted the official as saying the Libyan deal would strengthen Cairo's hand in the IMF talks. (Reporting by Tom Perry; Writing by Paul Taylor)