Egypt’s foreign reserves surge to $28.5B, highest level since 2011

CAIRO – 4 April 2017: Egypt's foreign reserves recorded their highest level since 2011, climbing to $28.526 billion by the end of March, up from $26.5 billion a month earlier, the Central Bank of Egypt (CBE) announced late Monday.

The rise was mainly driven by fresh financing from multilateral banks: $1 billion from the World Bank, the second tranche of a $3 billion loan agreement, and a $500 million second tranch of a similar loan from the African Development Bank.

The CBE had $36 billion in foreign reserves before the January 25 Revolution in 2011 which overthrew President Hosni Mubarak after 30 years in power, but political turmoil and security concerns had a heavy toll on tourism and foreign direct investments, two key sources of hard currency, draining more than 50 percent of the reserves.

Reserves have been on the rise since Cairo received $2.7 billion in November as the first tranche of a $12 billion loan from the International Monetary Fund (IMF) to support an ambitious economic reform plan. The second tranche is expected in June after an official review by the fund.

Egypt has reaped some early fruits from the reforms adopted so far, with foreign investors returning strongly to both the stock and local debt markets and significant improvement in remittances from Egyptians abroad and the country's balance of payments.

During the first half of fiscal year 2016/2017 (to end June 30), the overall balance of payment recorded a surplus of $7 billion, against a deficit of $3.4 billion in the same period a year earlier, according to the CBE.

The central bank also reported that total remittances from Egyptians abroad rose during the three months after the country's local currency flotation by 19.7 percent to hit $5 billion by the end of January.