Egypt’s Net International Reserves (NIR) dropped $119 million in October 2013 to record $18.6 billion, announced the state's Central Bank of Egypt (CBE) on Thursday.
The fall is NIR's second consecutive drop as they slipped by $200 million in September after the CBE held its largest exceptional auction early September, selling $1.3 billion of its foreign reserves to cover strategic imports such as wheat, meat, and cooking oil.
Mohamed Abu Basha, an economist at the Cairo-based investment bank EFG-Hermes told Ahram Online that the slight dip of the foreign reserves is attributed to the usual commitment of the CBE to meet the country’s staples.
“As the country is getting petroleum aid from the Arab Gulf states, this eases the CBE’s financial burden,” Abu Basha added.
The oil-rich Arab states of Saudi Arabia and the United Arab Emirates are keen on delivering petroleum products to the Egyptian government as scheduled following the ouster of Islamist president Mohamed Morsi in July, according to Tareq El-Molla, head of the Egyptian General Petroleum Corporation.
“Also, I think that repayment of the foreign debt service, such as interests, has contributed to the decrease in reserves,” Abu Basha deemed.
According to CBE' latest monthly bulletin, Egypt’s total external debt has leapt to $43.2 billion in the fourth quarter of the 2012/13 fiscal year, compared to $38.3 billion in the previous quarter.
The total debt service stood in June at $3 billion, more than $640 million of which were delivered interest payments.