The Central Bank of Egypt announced, on Monday, that its net international reserves increased by about $51m during August 2020, to reach $38.366bn, compared to $38.315bn in July 2020.
CBE Governor Tarek Amer revealed during his meeting with Prime Minister Mostafa Madbouly, on Sunday evening, that foreign cash inflows have been increasing since June 2020. These have now acquired more than 10% of the Egyptian treasury bills offerings.
Amer indicated that the value of the Egyptian pound has increased by 0.66% against the US dollar since the beginning of 2020. The local currency has also been the least depreciated against the US dollar since the beginning of the novel coronavirus (COVID-19) crisis.
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, FX reserves declined between March and May 2020, on the back of the pandemic, but rose again during June, July, and August.
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, Pound Sterling, and 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.
