(Abdelazim Saafan/DNE Photo)
Egypt’s net foreign currency reserves shrank $1.1bn to $14.922bn in June, according to the latest disclosed figures on Central Bank of Egypt’s website.
The drop may be attributed to debt repayments of $700m, extra fuel purchases to offset the national shortages that had crippled industries, and the stockpiling food supplies ahead of the holy month of Ramadan, economic expert Mohsin Adel told Al-Boursa daily.
He also explained that Egypt did not receive any foreign aid last month, and predicted that pressure will continue to mount on the country’s foreign reserves unless the new government succeeds in reviving tourism, foreign direct investments (FDI) and exports.
According to the central bank statement, the balance of payments (BOP) deficit narrowed to $2.1bn over the first nine-months of the fiscal year which ended 30 June. The central bank said the improvement in the BOP performance came on the back of the decline to $3.9bn in the current account deficit (from $7.1bn).
“Thanks to the drop of $0.7bn in the trade deficit, the rise of $ 1.0bn in tourism revenues to $8.1bn (from $7.1bn) and the pickup of $1.0bn in workers’ remittances to $13.9bn (from $12.9bn). The capital and financial account unfolded a net inflow of $4.3bn in the reporting period (against a net outflow of $2.7bn in the period of comparison),” the statement said.
The statement also illustrated a 35.8% increase in the services surplus, a 14.1% rise in the number of tourist nights, a 3.9% pickup in the transportation receipts, which were attributed to the larger receipts of Egyptian navigation and aviation companies.
There was, however, a 3.9% decrease in the capital and financial account to $3.8bn from $3.9bn. Another decline was in the outflows of portfolio investments attributed by the foreigners’ dealing in Egyptian treasury bonds (TBs);which unfolded net sales of $14.9m only (compared to the $3.9bn.)
The report also stated an increase in Foreign Direct Investment (FDI): “Net inflows of FDI in Egypt inched up to $1.4bn (from $1.2bn). This was a result of the contraction in the net outflows of investments in the oil sector, to stand at $607.5m (against $2.1bn) and the decline in Greenfield investments, to register a net inflow of only $1.7bn (against $2.0bn),” it said.
