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Monday, 8 June 2020

Egypt’s foreign reserves slip again in May, but at a slower pace

Foreign reserves slipped again in May, but at a slower pace: Foreign reserves edged down USD 1 bn to USD 36 bn in May, the third consecutive month of decline, albeit at a slower rate, according to Central Bank of Egypt (CBE) data. The central bank did not explain the dip. Egypt’s reserves fell by USD 3.1 bn in April after dropping USD 5.4 bn in March from a peak of USD 45.5 bn in February. Reuters also has the story..

Not yet included in our reserves base: Proceeds from the record USD 5 bn eurobond Egypt sold last month in its largest-ever issuance, Masrawy reports, citing unnamed sources. The issuance was 4.4x oversubscribed, attracting bids for around USD 22 bn worth of bonds.

Background: The CBE had previously dipped into reserves to meet USD 1.6 bn in external obligations, including a USD 1 bn eurobond that matured in April. It also provided an undisclosed sum of FX to back the purchase of strategic commodities. Foreign investors also pulled USD 17 bn out of Egypt since the beginning of the covid-19 crisis in March.

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