Egyptian banks said they would not open branches in Iraq or accept deposits as security on exports. Egyptian banks' decision is apparently a fall-out of the recent killing of Cairo's Ambassador, 51-year-old Ihab Al-Sherif, at the hands of his alleged Al-Qaeda kidnappers.
Egyptian Businessmen Association's General Secretary; Muhammad Yousef conveyed the refusal of Egyptian banks to open branches in Iraq to guarantee Egyptian exports to Iraq. Yousef said that they would wait at least for another year until the situation improves in Iraq by which time they expect the investment climate to improve.
Contractual agreements between Egyptian companies and the Iraqi government had reached USD 2bn in 2002, mainly from export of foodstuffs, pharmaceuticals and industrial materials. The agreement was within the framework of the oil for food programme.
Iraq was the 2nd largest importer of Egyptian goods, after Saudi Arabia and around 65,000 Egyptians were working in Iraq prior to the war.