Egypt’s net international reserves (NIRs) rose to $40.06 billion by the end of December 2020, up from $39.2 billion recorded in October and November, the Central Bank of Egypt announced on Tuesday.

This is the first time the NIRs have increased since October.

In the beginning of November, the CBE announced that Egypt’s NIRs witnessed a slight increase in October reaching $39.2 billion, up from $38.4 billion recorded in September.

In September 2019, Egypt’s NIRs recorded an all-time high of $45.1 billion, before witnessing a significant drop in March 2020, reaching $40 billion, driven by the unprecedented blow to global financial markets arising from the COVID-19 pandemic.

COVID-19 has caused the sharpest portfolio flow reversal on record for emerging markets, including the Egyptian market, according to the CBE.

As of the end of June 2020, Egypt’s NIRs started to bounce back for the first time since March, increasing to $38.2 billion, up from $36 billion in May.

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

He also said that treasury bill auctions have managed to attract 10 percent of foreign investments since June, adding that the Egyptian pound's performance against the US dollar has improved since the beginning of 2020 by 0.66 percent, unlike other currencies in the emerging markets.

Around $10 billion, out of $20 billion, returned to the Egyptian market after exiting it, from March through June, amid the onset of the COVID-19 pandemic, Goldman Sachs said in a recent report.

The report predicted Egyptian expat remittances would see an improvement that will enhance the country’s NIRs.

Egypt’s foreign exchange reserves are expected to reach $40.5 billion by the end of this quarter, ending in March, according to Trading Economics (TE) macro models and analysts’ expectations.

Egypt’s foreign exchange reserves are expected to stand at $44 billion in 12 months’ time and to jump to around $45.2 billion in 2022, according to TE.