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Monday, 5 March 2018

Reserves at the central bank hit USD 42.5 bn in February, their biggest jump since July

Reserves record their biggest jump since July: The central bank’s FX reserves recorded USD 42.5 bn in February from USD 38.2 bn in January — reaching another highest-ever mark. The USD 4.3 bn m-o-m increase is only dwarfed in recent years by the USD 4.7 bn recorded last July. The increase in February is mostly attributable to the successful USD 4 bn eurobond issue, which was 3x oversubscribed. “Net international reserves jumping to a new safe level will enhance investor confidence and minimize the funding gap even with the USD 12 bn of repayments outstanding for this year,” Hany Farahat, senior economist at CI Capital, told Reuters. He told Bloomberg “the surge in reserves ‘definitely facilitates the reduction in policy rates this year and minimizes the risk of currency outflows as rates decline.’” CBE Sub-Governor Rami Aboul Naga told Bloomberg the eurobond sale “was only one contributor to the increase. A marked improvement across a range of economic indicators had also provided a boost,” but did not elaborate further.

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