Egypt better positioned but more vulnerable

Bassem Abo El Abas, Saturday 27 Nov 2010

Egypt scores a surplus in its BOP despite a decline in exports, Suez Canal receipts and FDI

Suez canal
Suez Canal and exports receipts declined in 2009-2010.

Egypt scored a $3.36 surplus in its Balance Of Payment, despite a continuing decline in its exports, Suez Canal receipts and Foreign Direct Investment. The Central Bank of Egypt's latest figures show a shift to a suplus from a deficit of $3.38 billion recorded a year earlier. The balace of payments, which indicates all the financial transactions of Egypt with the rest of the world, ran an overall surplus of $3.36 billion in FY2009-2010, against an overall deficit of $3.38 billion a year earlier, according to the Central Bank of Egypt figures.

This shift is attributed mainly to the net inflows in the financial and capital account that quadrupled in a year, reaching $8.3 billion, because of a huge net Foreign Porfolio investments (FPI) flowing into the country, reaching $7.9 billion, mostly in treasury bonds, but also on the stock exchange.

The current account deficit narrowed partly because trade deficit remained mostly stable at $ 25.1 billion, while Egyptian transfers from abroad rose by 24.6% to $9.5 billion.

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