Egypt forex reserves up for first time since August

Ahram Online, Thursday 6 Feb 2014

Net international reserves rise for first time in five months due to a $2 billion deposit from Saudi Arabia

U.S. dollar
U.S. dollar notes are seen in this picture illustration (Photo: Reuters)

Egypt's net international reserves (NIR) rose to $17.105 billion at the end of January, the first increase since August 2013, according to the latest figures released by the Central Bank of Egypt (CBE) on Thursday. 

The $73 million rise compared to the $17.032 billion recorded at the end of December can be accredited to a fresh influx of financial aid from the Arab Gulf, an asset manager at Cairo-based HC Securities told Ahram Online.

CBE governor Hisham Ramez had also assured that foreign reserves would not fall below their current levels despite an exceptional FOREX auction held in late January which sold off $1.5 billion.

Ramez's announcement came after Saudi Arabia announced it would give Egypt up to $4 billion in additional aid in the form of CBE deposits and petroleum products.

Half of a $4 billion aid package pledged by the Saudi Kingdom was expected to be deposited at the CBE before the end of January, according to state-run daily Al-Ahram.

"The Saudi financial aid stemmed the forex losses from the extraordinary auction and the servicing of the Paris Club debt, resulting in a minor rise in reserves," Hazem explained.

Egypt was scheduled to pay an instalment of around $700 million to the Paris Club in January, the first half of a total of $1.4 billion debt due this year.

Aid to Egypt amounting to $12 billion from Saudi Arabia, the United Arab Emirates, and Kuwait after the ouster of Islamist president Mohamed Morsi in July had boosted Egypt's reserves to a high of $18.9 billion in August.

Forex auctions, the cost of food and petroleum imports, have since chipped away at the NIR, and the return a $3 billion deposit to Qatar, as relations between the two countries turned sour after Morsi's ouster.


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