The Central Bank of Egypt (CBE) has revealed that its net international reserves increased to $38.201bn in June, compared to $36.004bn in May, a growth of about $2.2bn.
The CBE’s net reserves recorded unprecedented level during 2019, as it jumped by about $3bn to $45.419bn at the end of last year. This compares to the $42.61bn recorded in January 2019. However, the FX reserves declined in March, April, and May 2020 on the back of the novel coronavirus (COVID-19) pandemic.
Egypt’s international reserves consist of foreign currencies, gold, special drawing rights (SDR), and net IMF loans. The FX reserves support the local currency, whilst fulfilling the country’s overseas obligations, and guaranteeing Egypt’s imports of basic commodities for several months.
Most of the Egyptian foreign currency reserves consist of US dollars, Euros, British pounds, and the Japanese yen.
The size of foreign currency reserves of any country represents a source of strength or weakness, according to its value and its ability to fulfil the country’s foreign obligations.
The Suez Canal revenues, tourism, exports, foreign investments, and remittances are the most important resources for Egypt’s foreign currency reserves.