Daily News Egypt

Foreign exchange reserves up by $392m at end of September - Daily News Egypt

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Foreign exchange reserves up by $392m at end of September

Volume of foreign currency liquidity up by $365m, gold up by $30m: CBE

The foreign exchange reserves at the Central Bank of Egypt (CBE) recorded a new record high at the end of September 2017, recording $36.535bn, compared to $36.143bn at the end of August 2017—an increase of $392m.

According to figures obtained by Daily News Egypt, foreign currencies at the CBE at the end of September 2017 rose by $365m to reach $33.026bn against $32.661bn in August.

The value of gold included in the reserves rose by about $30m to $2.710bn against $2.680bn.

The value of the Special Drawing Right (SDRs) listed in the reserves amounted to $772m, compared to $774m, while loans to the International Monetary Fund (IMF) registered $29m.

The foreign exchange reserves increased by more than $21bn over the past 14 months, where it stood at about $15.5bn in July 2016, an increase of more than 135.7%.

The market has seen considerable debate over the past period about the CBE’s using part of the dollar liquidity that foreign investors give in exchange for their local currency investments in Egyptian treasury bills.

There are also some fears about the fate of the reserve, because a large part of it is in the form of loans and foreign bonds, but a prominent banker told Daily News Egypt that the maturity of loans and bonds listed in the reserve varied and go up to 30 years, and therefore there is no concern, especially with the strong expectations of the return of natural hard cash resources, such as tourism, foreign direct investment, increasing Suez Canal income, remittances, and export earnings.

By the end of this year, the CBE will pay about $5.5bn in foreign bonds and debt installment repayments. It, however, expects $1.5bn to enter the reserves from the World Bank and the African Development Bank, along with a new batch of IMF loan, next to the conventional foreign exchange resources.

Egypt imports goods of value around an average of $5bn a month, registering $60bn per year. Hence, the current average foreign exchange reserve covers more than seven months of Egypt’s commodity imports, which is higher than the world average of about three months.

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