Egypt's net foreign reserves rise to $38.2bln in June- central bank

Foreign reserves had dropped since March from a high of more than $45bln

  
An employee counts Egyptian pounds in a foreign exchange office in central Cairo, Egypt, November 3, 2016. Image used for illustrative purpose.

An employee counts Egyptian pounds in a foreign exchange office in central Cairo, Egypt, November 3, 2016. Image used for illustrative purpose.

REUTERS/Mohamed Abd El Ghany

CAIRO- Egypt's net foreign reserves recovered some ground lost during the coronavirus outbreak, rising to $38.2 billion in June from $36 billion in May, the central bank said on Tuesday.

Foreign reserves have dropped since March from a high of more than $45 billion, as investors pulled cash from emerging markets and Egypt's tourism industry, a key source of foreign revenue, came to a near standstill.

Remittances from Egyptians working abroad have also been threatened by the crisis.

To help Egypt cope, the International Monetary Fund approved $2.77 billion in emergency funding in May. Last month, Egypt secured a separate $5.2 billion standby agreement loan from the IMF.

The rise in foreign reserves registered in June could reflect the receipt of the first $2 billion tranche of the standby loan, said Allen Sandeep of Naeem Brokerage.

"We expect foreign reserves to be largely flat until the end of the year, as the interbank market is well funded to deal with the non-essential trade balances," said Sandeep.

While the IMF emergency funding was designed to help Egypt close a gap in its balance of payments, the standby agreement is aimed at supporting macroeconomic stability and advancing structural reform.

(Reporting by Aidan Lewis; Editing by John Stonestreet and Jan Harvey) ((Aidan.Lewis@tr.com; +20-1001174410;))

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