Egypt's balance of payments surplus reached $5.1 billion in Q1 2017/2018 which runs July-September, up from $1.9 billion in the first quarter of the last fiscal year, the Central Bank announced in a Sunday report.
The improvement was driven by a 65.7% decrease in the current account deficit to $1.6 billion in Q1 2017/2018, compared to $4.8 billion in the same period of last fiscal year, the Central Bank said.
The balance of payments consists of the current account (trade balance, services balance, investment income balance, and net unrequited current transfers) and the capital and financial account.
The trade deficit narrowed by 5% year-on-year, recording $8.9 billion in the first quarter of this fiscal year.
This came on the back of an increase in merchandise exports by 11% to $5.8 billion, driven by a 16.8% increase in oil exports to $1.8 billion in Q1 2017/2018 as well as an 8.6% year-on-year increase in non-oil exports to $4.1 billion.
"This reflects the improved competitivity of Egyptian exports in world markets following the float of the exchange rate," the Central Bank said.
The improvement in the current account was also driven by the doubling of the services surplus to $2.8 billion, compared to $1.4 billion in the same quarter of last year, as travel payments fell by 41.3% year-on-year because credit card payments abroad fell by 165% year-on-year.
Also part of the services balance, Suez Canal revenues increased slightly to $1.4 billion, compared with $1.3 billion in the first quarter of last fiscal year.
Net unrequited current transfers increased by 38.3% year-on-year to $6 billion, as Egyptians' remittances surged to around $6 billion, a $1.6 billion increase compared to the the first quarter of last fiscal year.
Separately, foreign direct investments (FDI), which fall under the financial account, fell to $1.6 billion, compared to $1.9 billion in the same period last fiscal year.
As part of the FDI, net investment in the oil industry surged by 84.2% year-on-year, the Central Bank said.
Net portfolio investment in Egypt including bonds, also part of the financial account, saw an inflow that surged to $7.5 billion in Q1 2017/2018, compared to an outflow of an $832.5 million in the first quarter of last fiscal year.
This came on the back of the increase of net foreign holdings of Egyptian treasuries to $7.4 billion, compared with $55 million the same period last year.
Egypt floated the EGP in November 2016, which mainly impacted exports and foreign appetite for Egyptian debt.