The Central Bank of Egypt (CBE) has reported a significant rise in the country’s international exchange reserves, increasing by approximately $11.2bn since the start of 2024. As of June 2024, the reserves reached $46.383bn, up from $35.220bn in December 2023.
Egypt’s international reserves comprise a basket of major currencies, including the US dollar, euro, British pound, Japanese yen, and Chinese yuan. The distribution of these currencies within the reserves is based on exchange rates and their stability in international markets, following a plan set by CBE officials.
The primary function of international reserves, which include both gold and various international currencies, is to ensure the availability of essential goods, repay external debt instalments and interest, and address economic crises under exceptional circumstances. This is particularly important given the impact on revenue from hard currency-generating sectors.
Throughout 2024, international reserves exhibited steady growth, rising to approximately $35.250bn in January, $35.311bn in February, $40.361bn in March, $41.057bn in April, and then jumping to $46.126bn in May before reaching $46.383bn in June.
According to available data from the CBE, foreign currency reserves increased from $26.745bn in December 2023 to $36.889bn in June 2024, marking an increase of $10.144bn. Meanwhile, gold reserves rose from $8.440bn to $9.485bn, an increase of $1.045bn.
In May, Prime Minister Mostafa Madbouly announced that the Egyptian government received $14bn from the UAE as the second instalment of the “Ras El Hikma” deal. Additionally, in cooperation with the CBE, procedures began to convert a $6bn UAE dollar deposit into its equivalent in Egyptian pounds.
The International Monetary Fund (IMF) earlier predicted that Egypt’s international reserves would increase to $45.8bn during the fiscal year 2024/2025, with expectations of a continued rise to $61.7bn by the fiscal year 2028/2029.
JPMorgan forecasted that Egypt’s foreign reserves would rise by about $16.2bn during the fiscal year 2024/2025, reaching approximately $49.8bn, and then increasing to $52.5bn in 2025/2026.
Similarly, Goldman Sachs projected that Egypt’s total foreign reserves would surpass $61bn in 2027, as Gulf Cooperation Council deposits at the CBE are converted into direct investments in new projects. Goldman Sachs revised its forecast, expecting the total foreign reserves to reach about $50.2bn in 2024, continuing to rise to around $53.4bn in 2026, and reaching approximately $61bn in 2027.
Fitch Ratings also predicted an increase in Egypt’s foreign reserves by $16.2bn in 2024, reaching $49.7bn, and further increasing to $53.3bn by 2025.
