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Egypt’s foreign reserves hit $44bn in February

Central Bank of Egypt [File photo]
Central Bank of Egypt [File photo]

Egypt’s foreign reserves rose by $1.4 billion at the end of February 2019, reaching $44.06 billion, compared to $42.6 billion in January, the country’s central bank (CBE) announced yesterday.

“Egypt spends an average of $5 billion per month on imports from abroad, with an annual spent of more than $55 billion,” CBE said, explaining that the country’s current foreign reserves balance “would cover about eight months of Egypt’s imports of goods and services.”

The main function of the country’s foreign currency reserves, the bank pointed out, was to pay for Egypt’s imports from abroad, to repay foreign debt payments and its associated interests, and to be able to cope with any economic crises in exceptional circumstances.

The foreign currency sources in Egypt are exports, tourism and foreign investments. The foreign reserves are being kept and managed by the CBE in the form of gold or different international currencies.

Egypt’s foreign currency reserves have been witnessing continuous increases since 2014; hitting $37 billion, $24.3 billion, $16.4 billion, and $15.3 billion in 2017, 2016, 2015, and 2016 respectively.

READ: Egypt receives 5th $2bn tranche of IMF loan

In December, Egypt reserves fell to $42.551 billion, down from $44.513 billion in November. This marked the first drop in the country’s foreign reserves since the International Monetary Fund (IMF) three-year $12 billion loan programme was signed in November 2016. The IMF loan aimed at reviving the country’s struggling economy, bringing down public debt and controlling inflation while seeking to protect the poor.

In February, the government received the loan’s fifth instalment worth $2 billion, bringing the total amount paid to Egypt to $10 billion.

The Egyptian finance minister, Mohamed Maait, recently said that the IMF would carry out the “fifth and final review for the loan programme in June” ahead receiving the loan’s final $2 billion tranche.

Egypt has been negotiating billions of dollars in aid from various lenders to help revive an economy battered by political upheaval since the 2011 revolution and to ease a dollar shortage that has crippled import activity and hampered recovery.

According to the CBE’s official data, Egypt’s external debt increased by 15 per cent in September 2018, reaching $93.130 billion, compared to $80.831 during the same period of 2017.

READ: Egypt to cut fuel subsidies by 15% says minister

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