Egypt’s foreign reserves declined last month for the first time since the early days of the covid pandemic as the conflict in Ukraine rattled the global economy, the central bank said (pdf) last week. Reserves came in at nearly USD 37.1 bn at the end of March from just under USD 41.0 bn at the end of the previous month.

What happened? The central bank “mobilized excess foreign currency reserves to calm the markets during periods of exceptional stress,” the statement said, pointing to what it described as a “massive sell-offs in emerging markets.” The CBE said it deployed some of its reserves to cover “substantial foreign investor outflows and partially cover local demand in order to ensure the availability of imported strategic goods and to repay external debt obligations in a timely manner.”

The CBE is projecting calm: “Net international reserves remain at ample levels, covering more than five months of imports, exceeding global reserve adequacy measures,” the central bank said.

The central bank is also getting more firepower to work with thanks to our friends in the GCC. The UAE is reportedly looking to invest USD 2 bn in Egypt, Qatar said at the end of March it would commit some USD 5 bn here and Saudi Arabia said days later that it was making a USD 5 bn deposit at the CBE and could invest some USD 10 bn in Egypt. The Madbouly government is also in talks with the International Monetary Fund for a new program that could unlock additional financing.

The story is getting coverage in the global business press: Reuters | Bloomberg | Xinhua.