CAIRO - 4 June 2024: The Central Bank of Egypt (CBE) announced that Egypt's net foreign reserves increased to $46.126 billion by the end of May 2024, rising by $5.068 billion compared to April 2024's $41.057 billion.
Previously, Fitch Ratings had predicted that Egypt's foreign currency reserves would reach $49.7 billion in FY2023/2024 and $53.3 billion in FY2024/2025.
Fitch Ratings has also improved Egypt's long-term foreign-currency (LTFC) Issuer Default Rating (IDR) outlook from Stable to Positive, while maintaining the IDR at 'B-'. This change underscores Egypt's enhanced economic resilience and reduced external vulnerabilities.
The rating agency identified several factors contributing to this positive outlook. Firstly, Egypt has effectively mitigated immediate external financing risks through initiatives like the Ras El Hekma deal with the United Arab Emirates (UAE), the implementation of a flexible exchange rate, and stricter monetary policies. These measures have facilitated additional financing from international financial institutions (IFI) and stimulated renewed inflows of non-resident capital into the domestic debt market.
Recently, the cabinet confirmed that Egypt has officially received the second tranche of the Ras El Hekma deal from the UAE. Prime Minister Mostafa Madbouly revealed that the UAE transferred $14 billion as part of the agreement.
According to the cabinet statement, Egypt is collaborating with the UAE to convert an Emirati deposit of $6 billion in the CBE into Egyptian pounds (LE 280 billion) and waive it.
In February, there were reports of coordination between the CBE and the UAE to convert $11 billion worth of UAE deposits into LE.
Comments
Leave a Comment