Egypt’s central bank has received $2 billion in funds from South Arabia, the latest installment of a $12 billion aid package pledged by Gulf Arab states after the overthrow of Mohammed Morsi on July 3.

The United Arab Emirates (UAE) transferred $3 billion to Egypt last Friday, $2 billion of which was a cash deposit and $1 billion an outright grant.

Egypt’s 2011 popular uprising has left the country’s finances and economy in a poor state, worsened in the first five months of 2013 under President Mursi’s rule, with the budget deficit widening to almost half of all state spending.

Foreign reserves fell to $14.9 billion in June, representing less than the three months of imports that the International Monetary Fund considers to be a minimum safe cushion.

The financial difficulties forced former president Mursi to approve a 24.2 percent increase in borrowing to finance the budget deficit days before he was deposed, a law published in the official gazette on yesterday showed.

Hisham Ramez, Egypt’s governor of the central bank told the media that the Saudi funds arrived in the form of a five-year interest-free deposit at the bank.

Kuwait has pledged $4 billion and Saudi Arabia a further $2 billion in energy products and $1bn in cash. Ramez said no date had been set for the Kuwaiti payment and did not indicate when the Saudi $1 billion is expected.

The law signed by Mursi increased total government spending on energy subsidies by EGP 20 billion ($2.86 billion) and boosted interest payments on government debt by EGP 12.65 billion ($1.8 billion).

Egyptian securities were deserted by foreign buyers after the uprising that toppled Hosni Mubarak in early 2011, forcing the government to rely on local banks for finance. Interest rates were pushed into double digits.

A new leadership is in place in Egypt, including former UN nuclear agency diplomat, Mohamed El Baradei who is now vice-president.