Data from the Central Bank of Egypt showed that net foreign assets fell by $3.25 billion in November, the second decline in two months amid pressure on the local currency due to impending foreign obligations.
According to Reuters calculations based on the central bank’s official exchange rates, net foreign assets fell to the equivalent of $5.96 billion from $9.21 billion at the end of October.
The decline came after a decline of $1.12 billion in October.
Egypt has been using net foreign assets, which include foreign assets at the Central Bank and commercial banks, to contribute to supporting the pound since at least September 2021.
Net foreign assets fell to negative territory in February 2022 and did not return to positive territory until May 2024.
Pressure
The Egyptian currency was under particularly severe pressure ahead of huge foreign commitments last December.
Bankers, brokers and analysts said that these obligations include the maturity of treasury bills in Egyptian pounds to foreign investors, the repayment of about one billion dollars in International Monetary Fund loans, and payments for natural gas imports.
On December 5, the exchange rate exceeded the level of 50 pounds to the dollar for the first time since March, when the International Monetary Fund approved an $8 billion financial support package and Egypt allowed its currency to fall.
Foreign assets at the central bank increased in November but decreased at commercial banks. Foreign liabilities of commercial banks and the central bank declined.
Yesterday, data from the Central Bank of Egypt showed a slight increase in Egypt’s net foreign reserves to $47.109 billion in December from $46.952 billion in November.
