Egypt's foreign reserves to reach highest level since 2011 in March: CBE

Menna Alaa El-Din , Sunday 2 Apr 2017

Egyptians and USD
In this March 14, 2016 file photo, Egyptians walk past a currency exchange office in Cairo, Egypt. (AP)

The Central Bank of Egypt (CBE) expects that the country's foreign reserves will rise to more than $28.5 billion at the end of March, the highest benchmark since March 2011, a CBE deputy told state-owned MENA news agency on Sunday.

Deputy Ramy Aboul Naga said that the bank expects to witness an increase of around $2 billion to reach $28.5 billion, up from $26.5 billion in February 2017.

Egypt received in March the second $1 billion tranche from a $3 billion World Bank loan, as well as the second $500 million tranche from a $1.5 billion loan from the African Development Bank (AfDB).

The World Bank's loan is intended to help in achieving fiscal consolidation, ensuring energy supply and enhancing competitiveness in the private sector.

Egypt is currently negotiating for the third and final $1 billion tranche of the World Bank's loan package to support the government’s economic reform programme.

The AfDB loan is intended to support government programmes that aim to achieve social and economic development by creating new jobs and improving the business environment.

Egypt's economic reform programme has included cutting subsidies and the introduction of new taxes, such as the value-added tax, as well as the floating of the Egyptian pound.

In November 2016, Egypt received an initial $2.75 billion from the International Monetary Fund (IMF) following the board’s approval of a $12 billion loan, with a second tranche by the IMF expected in May.

Egypt's foreign reserves registered $36 billion before the popular uprising that toppled former president Hosni Mubarak in January 2011 led to a period of political turbulence, which undermined Egypt's vital sources of foreign currency such as tourism and foreign investment.

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