Capital flight from Egypt and Libya hit $8 billion during Arab Spring

The Arab Spring drained more than US$8.6 billion (Dh31.58bn) in bank deposits from Egypt and Libya in the first three months of the year, according to the Bank for International Settlements.

International banks reported sharp rises in deposits from the two countries during the period, a trend that the international banking organisation attributed to political upheaval diverting funds away from Egypt and Libya.

"These developments most likely reflected domestic funds being moved out of the two countries as a result of the elevated levels of political and economic uncertainty," the report said.

Capital flight occurs when investors withdraw large amounts of money from a country.

Egypt, the most developed banking market in North Africa, lost $6.4bn to the outflow during the period.

Deposits by Libyans in international banks increased by $2.2bn during the period, while Tunisia, where the government of Zine El Abidine Ben Ali was toppled in early January, suffered capital flight of $29m during the quarter. During the same period, international bank deposits from UAE residents increased by 23 per cent to $17bn. The report attributed this to a surge in local wealth created by soaring oil prices.