Egypt’s net international reserves climb to $46.49 despite recent external debt repayments

Cairo – August 7, 2024: Registering an increase of $110 million, Egypt’s net international reserves jumped to $46.49 billion by the end of July, according to the latest data from the Central Bank of Egypt, climbing from June’s $46.38 billion.

The rise in reserves comes in contrast with Egypt’s recent repayment of international debts, with the country’s external debt falling by 8.43 percent to $153.86 billion as of May, down from $168.03 billion at the end of December 2023.

Foreign currency reserves dipped slightly from $36.9 billion in June to $36.3 billion last month.

The CBE’s net foreign liabilities fell to $1.3 billion and that of banks to $2.8 billion, from $17.5 billion in January.

The International Monetary Fund (IMF) completed its 3rd review of Egypt’s Extended Fund Facility (EFF) in late July, opening up $820 million from its $8 billion loan. Finance Minister Ahmed Kouchouk revealed that Egypt received the deposit just days later.

The IMF’s completion of the 3rd review also provides Egypt with access to an additional $1.2 billion in long-term, low-cost climate financing from the fund’s Resilience and Sustainability Facility.

Since the $35 billion Ras El Hikma deal earlier this year, Egypt’s net foreign reserves have jumped by $11.2 billion in the past 5 months, providing the central bank with the opportunity to float the pound with a strong buffer.

Earlier this month, Fitch Ratings projected foreign reserves to further rise to $49.7 billion in the current fiscal year and to $53.3 billion in FY2025/2026 following its recent upgrade of Egypt's long-term foreign currency Issuer Default Rating from stable to positive.

The ratings agency added that, citing greater exchange rate confidence, it predicts that the country’s current account deficit will narrow to three percent of gross domestic product (GDP) in FY2025/2026.

Looking ahead, Egypt is expected to receive additional inflows of hard cash, including over $6 billion in aid from the World Bank over the next three years and €5 billion from the EU by 2027 via concessional loans.