Egypt’s net foreign assets have risen by $43 billion since January, thanks mainly to international support.
Egypt’s net foreign assets posted their first surplus in more than two years in May at $14.3 billion, up from a $3.7 billion deficit in April, according to the latest data. Egyptian Central Bank Egypt’s net foreign assets have seen a huge recovery in recent months after reaching a record high of nearly $30 billion earlier this year.
Since February 2022, the country’s net foreign assets have been in deficit amid regional tensions between Russia and Ukraine, foreign investor outflows, and domestic and global political uncertainty.
Investments boost banking sector
The Central Bank of Egypt’s foreign assets recorded a surplus of $9.7 billion in May, compared to a deficit of $763 million in April. As a result, the Central Bank’s foreign assets increased by about $4.8 billion, while foreign liabilities decreased by about $5.6 billion.
Meanwhile, the country’s commercial banks saw their net foreign assets rise to a surplus of $4.6 billion, a significant increase from a deficit of $2.9 billion in April. Commercial banks saw their foreign assets rise by $6.9 billion, while foreign liabilities fell by $625 million during the same period.
Last May, Egypt received the second and final tranche of the Ras El Hekma agreement, in addition to a large influx of foreign funds, which supported the recovery of its net foreign assets.
On the other hand, Egypt’s net foreign liabilities hit a record high of $29 billion in January. However, measures such as the currency float and the massive investment in Ras El Hekma contributed to the decline in the government’s liabilities.
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International reserves reach record high
Egypt’s net foreign assets have risen by about $43 billion since January, mainly due to international support, especially the massive $35 billion investment from the United Arab Emirates. However, the data also indicates a return of investment inflows.
Egypt saw pledges of about $57 billion in addition to the agreement with the UAE, which boosted Egypt’s net international reserves to a record high of $46.1 billion in May.
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