Egypt’s Foreign Assets Situation

CAIRO (Reuters) – Egypt’s net foreign assets (NFAs) remained positive for a second consecutive month in June, after being deeply negative for over two years, according to central bank data.

NFAs decreased to 626.6 billion Egyptian pounds in June from 676.4 billion pounds at the end of May. This is equivalent to $13.05 billion at the end of June, down from $14.31 billion at the end of May, based on Reuters calculations using the official central bank exchange rate at the time.

Since at least September 2021, Egypt has been utilizing its NFAs, which encompass foreign assets at both the central bank and commercial banks, to stabilize its currency. NFAs turned negative in February 2022.

However, in February this year, the government improved its finances by selling development rights for Ras El Hekma on the Mediterranean coast for $35 billion, and in March, it signed an $8 billion financial support package with the International Monetary Fund.

Additionally, the government significantly devalued its currency, which led to a surge of portfolio investments and remittances from overseas workers.

While foreign assets at commercial banks decreased in June, they increased at the central bank. Furthermore, foreign liabilities rose at both commercial banks and the central bank.