Who needs Qatar now? Egypt's reserves up for first time in six months
Egypt’s net international reserves surged at the end of January to record $17.105bn, up from $17.05bn in December, the Central Bank of Egypt (CBE) said on Thursday. This marks the first rise in foreign reserves since last August.
Foreign reserves reached $18.916bn at the end of August, only to decline to $18.7bn in September followed by another descent in October, reaching $18.59bn. By the end of November, foreign reserves stood at $17.76bn.
Banking and economic expert Bassant Fahmy attributed the increase to the implementation of the first step of the political roadmap, adopted after the ouster of former President Mohamed Morsi from power in July, through ratifying the constitution.
Fahmy added that ratifying the constitution fueled positive market performance in January. “Banks’ activities were also boosted as people returned their savings to the banks,” she said.
Fahmy expects that the slight increase in foreign reserves will continue in the case that the country’s political situation remains stable.
A total value of $4bn is expected to be sent to Egypt from Saudi Arabia in January, $2bn of which will be deposited in the CBE, state-run Al-Ahram reported on 30 January.
On 27 January, the central bank held its fourth exceptional auction to sell $1.5bn of its foreign reserves in an attempt to supply banks with cash needed for their clients’ import needs.
In January, Egypt paid $700m to the Paris Club, a portion of its $1.4bn debt to the entity. The Paris Club is comprised of 19 developed economies and assists borrowing states in the repayment of their debts.
Egypt’s foreign debt as of the end of October 2013 stood at $46.64bn, CBE governor Hisham Ramez stated in December.
Egypt’s foreign currency reserves have been under pressure since the 2011 revolution. In March of last year, they dropped to $13.4bn, which was deemed at that time below the needed amount to cover the country’s imports. On the eve of the revolution, CBE foreign reserves registered $36bn.
In July, Gulf countries pledged $12bn in aid to Egypt after the removal of former President Mohamed Morsi.
- First banks, now companies: Gulf firms 'go Islamic'
- No where to hide: Israel, UK ally against tax evasion epidemic
- Nasdaq-style crisis: is the Saudi stock market not ready to come out yet?
- Panic sell-offs: Gulf markets slide after U.S. oil hits six-year low
- What will it take for Egypt to get the $300 billion it wants?