Egypt’s net foreign assets stayed positive for a second consecutive month in June following more than two years of negative readings, the central bank revealed. The surplus reached EGP626.6 billion ($12.72 billion) in June 2024, slightly down from EGP676.4 billion ($13.73 billion) in May and following a deficit of EGP174.385 billion in April 2024.
On March 6, the Central Bank of Egypt (CBE) took the decision to unify the exchange rate and increase the interest rate by 600 basis points which significantly contributed to the positive net foreign assets reading in June.
Total foreign assets
In a recent report, Egypt’s central bank stated that the total foreign assets of both the CBE and commercial banks reached EGP3.634 trillion in June, while liabilities stood at EGP3.008 trillion. The central bank also revealed that domestic liquidity in the banking sector rose to EGP10.622 trillion in H1 of 2024 from EGP8.877 trillion in December 2023.
Foreign currency deposits rise
Egypt also reported a rise in non-governmental deposits in foreign currencies to EGP2.531 trillion in June, up from EGP1.561 trillion in December 2023. Demand deposits in foreign currencies amounted to approximately EGP616.5 billion, while time deposits and savings certificates reached approximately EGP1.914 trillion. The public sector accounted for about EGP26.216 billion of demand deposits, the private sector EGP410.930 billion, and the household sector EGP179.664 billion.
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Currency support
Egypt has been using its net foreign assets to help support its currency since September 2021. However, net foreign assets turned negative in February 2022.
In February 2024, the government boosted its finances by selling the development rights to Ras El Hekma for $35 billion. In addition, it signed an $8 billion financial support package with the International Monetary Fund in March. It also sharply devalued its currency, triggering an influx of portfolio investments and remittances from workers abroad, all of which supported its net foreign asset balance.
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