Cairo: Egypt’s foreign reserves rose to $36.143 billion (Dh132.64 billion) at the end of August from $36.036 billion at the end of July, the central bank said on Wednesday, a slight increase after a sharp jump a month earlier.
Egypt has suffered a shortage of hard currency since tourists and foreign investors were driven away by a 2011 uprising. The shortage hampered the import-dependent country’s ability to purchase from abroad and created a black market that kept much of the foreign currency out of the official banking system, shaking investors’ confidence and slowing economic growth.
Foreign reserves have been climbing steadily since Egypt floated its currency, the pound, in November. That helped it clinch a $12-billion International Monetary Fund loan aimed at attracting foreign investors and reviving the ailing economy.
Reserves rose by some $4.73 billion between June and July, putting the figure above pre-2011 levels.
“We increased in July and August despite having honoured almost $3 billion worth of commitments (short term debt, FCY needs by various government entities, etc),” said central bank sub-governor Rami Aboul Naga.
Some economists attributed the jump in July to portfolio investment, demand for which has boomed since November, as the Central Bank of Egypt raised interest rates by 700 basis points after the pound was floated.
“It’s not clear whether some proceeds from foreigners’ purchases of Egyptian treasury bills are included or not, but we expect that the additional inflows from the interbank market could have been included in the previous month’s reserves,” said Reham Al Desouki, an economist at Arqaam Capital.
