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Egypt’s international reserves increase to $38.36 bln by end of August: CBE

Doaa A.Moneim , Tuesday 8 Sep 2020
The headquarters of Egypt
The headquarters of Egypt's Central Bank are seen in downtown Cairo (Reuters)

Egypt’s international net reserves (NIR) increased slightly to reach $38.36 billion by the end of August, up from $38.31 in recorded in July, the Central Bank of Egypt (CBE) announced.

Foreign exchange reserves recorded $39.2 billion during August, up from $33.6 billion in July.

Gold reserves also went up to $4.52 billion in August, compared to $4.50 billion recorded in July, according to the CBE.

In September 2019, Egypt’s NIR recorded an all-time high of $45.117 billion, before witnessing a significant drop in March 2020 to reach $40 billion driven by the unprecedented blow to global financial markets arising from the COVID-19 pandemic, which caused the sharpest portfolio flow reversal on record from emerging markets, including the Egyptian market, according to the CBE.

As of the end of June, Egypt’s NIR started to bounce back for the first time since March, increasing to $38.2 billion, up from $36 billion in May.

On Sunday, CBE Governor Tarek Amer said that mid-June witnessed a robust return of foreign investors to the Egyptian financial market in light of the global market recovery and the successful efforts done by the Egyptian government to contain the pandemic and its repercussions.

He also said that treasury bill (T-bills) auctions have managed to attract some 10 percent of foreign investments since June, adding that the Egyptian pound performance against the US dollar has improved since the beginning of 2020 by 0.66 percent, unlike counterpart currencies in the emerging markets.

Egypt is expected to receive the second tranche of the stand-by agreement (SBA) loan approved by the International Monetary Fund in June to implement the second wave of Egypt’s structural reforms.

In June, Egypt was handed the first tranche, worth $2 billion out of $5.2 billion, while it is expected to receive $3.2 billion after reviews that are anticipated to be carried out in December 2020 and June 2021.

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