|07 November, 2019

Egypt’s foreign reserves rise $26.2bln since EGP flotation

Net foreign reserves stood at $45.246bln in October

A man walks past a currency exchange bureau advertisement showing an image of the U.S. dollar in Cairo, Egypt October 13, 2016. Image for illustrative purposes.

A man walks past a currency exchange bureau advertisement showing an image of the U.S. dollar in Cairo, Egypt October 13, 2016. Image for illustrative purposes.

REUTERS/Mohamed Abd El Ghany

Cairo –  Egypt’s international reserves have increased by $26.2 billion since the flotation of the Egyptian pound until the end of October, according to a survey conducted by Mubasher.

Following 2011 popular uprising

Before 2011, the country’s foreign reserves stood at nearly $36 billion, but then declined due to the decrease in foreign direct investments and tourism income.

International reserves continued to be on a downturn trend, falling to the lowest level of $13.6 billion in March 2013.

Flotation of EGP

On 3 November 2016, the Central Bank of Egypt (CBE) decided to float the Egyptian pound exchange rate, a move that helped boost international reserves.

In addition, receiving the first tranche of the $12 billion three-year loan from the International Monetary Fund (IMF) also contributed to increasing foreign reserves to $23.05 billion at the end of November 2016, compared to $19.04 billion a month earlier.

International bonds

Throughout 2018, Egypt’s international reserves experienced several increases, exceeding $42 billion at the end of February 2018 after the issuance of $4 billion international bonds and then rising to more than $44 billion at the end of April in the same year after the issuance of EUR 2 billion bonds.

Top level

Over the last three years, the country’s net foreign reserves continued to grow, registering $45.246 billion in October on the back of higher tourism income which surged to $12.57 billion in fiscal year 2018/2019, compared to $9.80 billion a year earlier.

With plans to issue dollar-denominated bonds in the international markets in the coming period, the country’s foreign reserves are expected to further increase.

Previously, the Egyptian finance minister Mohamed Maait announced plans to issue international bonds at a value ranging between $3-7 billion during FY19/20.

Source: Mubasher

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