The Central Bank of Egypt (CBE) has revealed that the country’s net foreign reserves rose by nearly USD 53 mn to reach a record level of USD 44.969 bn by the end of August, Invest-Gate reports,
In the previous month, net foreign reserves reached USD 44.917 bn, the CBE announced on September 4. However, mixed feelings were curled up by some market experts, anticipating that reserves will drop in the upcoming period due to various factors.
“By receiving the last tranche from the International Monetary Fund (IMF), Egypt will not have another major source of foreign reserves. Key sources of foreign reserves for Egypt’s banking system are the tourism and export sectors, as well as, the Suez Canal, but all these sources are suffering and do not provide the adequate revenues, especially in foreign currency,” Basant Fahmy, a member of the Egyptian parliament’s economic affairs committee, told Ahram Online.
Fahmy further stated, “Given the global unset, it is not expected that Egypt will attract more tourists, in addition, the export sector will not be able to do well due to the trade war. Moreover, the global conflict will also affect the Suez Canal’s performance. For investment, foreign investors and businessmen might be forced by this tension to suspend all investments in Egypt, especially since global companies are dominated by China, Europe, and the US.”
It is worth noting that the current average of foreign reserves covers about 7.2 months of Egypt’s commodity imports, which is higher than the global average of about three months of commodity imports, according to the planning ministry’s official data.