Egypt’s foreign currency reserves are still ‘safe’: CBE

The Deputy Governor of the Central Bank of Egypt (CBE) Ramy Aboul-Naga, announced that the nation’s foreign currency reserves are still at “safe” levels, despite declining for the second consecutive month to about US$37.04 billion at the end of April compared to about $40.11 billion at the end of March: a fall of roughly $3.1 billion.

The reserves cover commodity imports for roughly seven months, he said, adding that the pandemic’s repercussions on the global market are carrying on for the second month in a row, albeit at a lower rate to the previous month which witnessed the peak of exits from investment portfolios from emerging markets.

According to Aboul-Naga the CBE is handling the crisis in a proactive manner and not reactively, therefore moving early through a large financing package and exceptional measures to support and strength the Egyptian economy in these current times.

The CBE used $3.1 billion from the foreign reserves during April to cover the Egyptian market’s foreign currency needs guaranteeing the import of strategic goods alongside paying international obligations related to the country’s external debt; estimated at about $1.6 billion.

This included international bonds amounting to a billion dollars as well as the exit of some investors through the CBE’s mechanism for transferring money from foreign investors.

He ruled out any substantial impact resulting from the decrease in foreign reserves on the balance of payments and the banking market, and assured that the domestic market exceeded the peak of foreign investment exit from the government’s debt instruments market – treasury bills and bonds.

Aboul-Naga assured that the central bank maintains transparency and discloses everything related to its crisis management procedures and foreign reserve uses, which all fall under the CBE’s framework of maintaining the Egyptian market in light of these globally turbulent economic conditions.

Edited translation from Al-Masry Al-Youm

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