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Monday, 5 February 2018

Egypt’s net FX reserves rose to USD 38.2 bn in January

Egypt’s net FX reserves see biggest m-o-m jump since July: Egypt’s net FX reserves rose to USD 38.2 bn as at the end of January, up from USD 37.02 bn at the end of December, making their biggest m-o-m jump since July last year, according to CBE figures released yesterday. The rise came on the back of a USD 1.5 bn increase in inflows into the banking system, which recorded total flows of USD 5.6 bn, CBE Governor Tarek Amer said statements to the press last night. He noted that Egypt’s debt service obligations to the Paris Club were down by half at the start of 2018, with the state having had to repay only USD 290 mn. “The data is the latest sign that Egypt has turned the page on a USD shortage that squeezed the economy before authorities abandoned most currency restrictions and cut subsidies,” says Bloomberg. It is also a “strong sign the economy is able to accumulate excess USD, even if it is funded to a large extent by external borrowing,” said CI Capital senior economist Hany Farahat.

CBE Sub-governor Rami Aboul Naga had said last week that Egypt’s foreign reserves are sufficient to cover eight-months’ worth of imports — a very positive development, according to Allen Sandeep, head of research at Naeem Brokerage. “It will be even more positive if this was a result of real improvements in the trading account — for example, higher exports and drop in imports,” Sandeep told Reuters.

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