Egypt’s net foreign assets deficit recorded unprecedented decline of $17.8B in March, CBE

Cairo – May 1, 2024: Witnessing a substantial decline of $17.8 billion, Egypt’s net foreign assets (NFA) deficit fell to $4.224 billion at the end of March 2024, compared to $21.94 billion at the end of February.

According to recent data by the Central Bank of Egypt (CBE), this is the second consecutive month in which the NFA deficit has dropped.

The central bank’s foreign assets rose by $3.5 billion while foreign liabilities decreased by $3.9 billion.

The deficit continues to decline due to increased inflows of remittances and foreign portfolio investments, including the second payment of the Ras El Hikma deal in early March.

Further accelerating Egypt’s recovery after dealing with a prolonged foreign currency shortage was the Egyptian pound’s devaluation, which triggered an increase in Egypt’s loan from the International Monetary Fund (as well as approval for the previously delayed tranches), as well as a surge of portfolio investments and remittances from workers abroad.

Another decline in the net foreign assets deficit is expected, with the current figures not including the $830 million received from the IMF’s delayed tranches.

The LE currently stands at LE 47.88 against the USD, up from March’s recorded LE 47.26 and February’s LE 30.94.

Between February and March, Egypt received $10 billion from the Ras El Hikma deal with UAE sovereign fund Abu Dhabi Holding Company (ADQ), as well as separate deposits into the CBE.