Graph: Egypt’s foreign reserves soar on large inflows

CAIRO – 3 August 2017: After six years of economic challenges, Egypt’s international foreign reserves hit record high in July, standing at $36.04 billion after a $4.7 billion rise; the biggest hike since the approval of the International Monetary Fund (IMF) loan.

This figure is equivalent to the $36 billion recorded before the 25 January Revolution of 2011.

The IMF Extended Fund Facility, clinched in November 2016, helped in boosting the country’s foreign reserves, commercial bank HSBC said in a research note Wednesday.

HSBC attributed the rise to a 21 percent reduction in the trade balance in the first five months of 2017 as exports increased 16 percent, while imports slumped seven percent.

Other reasons mentioned by HSBC included a rise in international remittances and $13 billion investments in local domestic debt tools, treasury bills and bonds.

Member of the Parliament’s Economic Committee Mohamed Badrawi told Egypt Today that the jump in reserves will enable Egypt to repay its loan installments and dues to foreign companies operating in the oil and gas sector.

“The increase shows that the U.S. dollar is available in the domestic market,” Badrawi said, adding that it is important for the government to have sustainable foreign resources from sources such as tourism, exports, foreign direct investment and international remittances.

July has seen the largest ever inflows of foreign currency into the banking sector, with $7.8 billion, Deputy Governor of the Central Bank of Egypt (CBE) Ramy Aboul-Naga said Tuesday, adding that this reflects a confidence in the Egyptian economy.

The hike was reflected on the foreign currency exchange rate in Wednesday’s transactions as the U.S. dollar lost five piasters against the Egyptian pound, recording LE 17.79 for buying and LE 17.89 for selling.