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Egypt's foreign reserves enough to cover 6 months worth of imports: Central bank official

Ahram Online , Wednesday 8 Feb 2017
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File Photo: A customer counts his U.S. dollar notes in a bank in Cairo, Egypt March 10, 2016 (Photo: Reuters)
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Egypt’s foreign reserves are sufficient to cover around six months worth of imports, a Central Bank of Egypt (CBE) official said, one day after those reserves hit their highest since 2011’s political turmoil.

In statements to Bloomberg News, Assistant Subgovernor of the CBE Rami Aboul Naga said that Egypt’s foreign reserves registered $26.3 billion at the end of January 2017, up from $24.2 billion in December 2016.

Egypt held $36 billion in reserves before the 2011 uprising, which overthrew president Hosni Mubarak, ushered in a period of political turmoil, scaring away tourists and foreign investors -- two key sources of foreign currency.

“In the past few weeks, we’ve been seeing persistent and growing inflows across equities and fixed income,” Aboul Naga said late on Monday.

Last week, Egypt received a total of $4 billion in yields from Eurobonds issued on the global bond market.

Cairo has also received several tranches of loans, including an initial $2.75 billion from the International Monetary Fund (IMF) as part of a $12 billion loan.

A second tranche of the IMF loan is set to be disbursed to Cairo in late April.

The official's statements came after the CBE announced earlier Monday that remittances sent to Egypt by nationals abroad grew by 15.4 percent to $1.6 billion in December 2016, compared to the same month the previous year.

Around 72 percent of total remittances received in the last quarter of 2016 were sent by Egyptian expats following the CBE's decision to float the Egyptian pound in November.

On 3 November 2016, the CBE decided to freely float the pound and raise key interest rates as part of a set of reforms aimed at solving a dollar scarcity and eradicating currency trading on the black market.

The pound, which was traded at a stable rate of approximately 8.8 to the dollar prior to the float, is currently being traded at around EGP18.5.

 

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