CAIRO, Feb 6 (Reuters) - Iran has offered to lend money to cash-strapped Egypt despite being under international economic sanctions itself over its nuclear programme, visiting President Mahmoud Ahmadinejad was quoted on Wednesday as saying.
The two countries do not have diplomatic relations but Egypt's first Islamist president, Mohamed Mursi, gave Ahmadinejad a red-carpet welcome on Tuesday when he became the first Iranian leader to visit in more than 34 years.
"I have said previously that we can offer a big credit line to the Egyptian brothers, and many services," Ahmadinejad told the Egyptian daily al-Ahram in an interview. He did not say if there had been any response.
The president said the Iranian economy had been affected by sanctions but it is a "great economy" that was witnessing "positive matters", saying exports were increasing gradually.
The United States and its Western allies have sought to choke off Iran's vital oil exports by embargoing imports from the Islamic republic and cutting its access to shipping, insurance and finance.
Egypt disclosed on Tuesday that its foreign reserves had fallen below the $15 billion level that covers three months' imports despite recent deposits by Qatar to support it.
Tourism has been badly hit by unrest since the uprising that toppled authoritarian President Hosni Mubarak two years ago, and investment has stalled due to the ensuing political and economic uncertainty.
Ahmadinejad said there had been scant progress on restoring ties between the Middle East's two most populous states, broken off after Iran's 1979 Islamic revolution and Egypt's signing of a peace treaty with Israel in the same year.
"No change happened in the last two years, but discussions between us developed and grew, and His Excellency President Mohamed Mursi visited Iran and met us, as he met the Iranian foreign minister. And we previously contacted Egypt to know about what is happening with Syrian affairs," he said.
One persistent obstacle to ties in Cairo's eyes was the naming of a street in Tehran after an Egyptian Islamist militant who led the 1981 assassination of President Anwar Sadat, who signed the treaty with Israel.
"On the question of the street name or its removal, these are matters that will be dealt with gradually," Ahmadinejad said.
The Iranian leader visited the historic al-Azhar mosque and university on Tuesday and met its grand sheikh, Egypt's leading Sunni Muslim scholar, but received a stern rebuke over Iran's attitude towards Gulf Arab states and its attempts to spread Shi'ite influence in Sunni countries. (Reporting by Tom Perry; Writing by Paul Taylor)