The Central Bank of Egypt (CBE) has reported an increase of $146 million in foreign exchange reserves for the month of June, marking the reserve’s tenth consecutive monthly increase.
According to data released lately on the central bank’s website, foreign exchange reserves rose to $34.806 billion at the end of June, up from $34.660 billion at the end of May.
This increase in foreign reserves comes despite the impact of the foreign exchange crisis resulting from the negative consequences of the Russo-Ukrainian war, which led to $22 billion in indirect foreign investment outflows from Egypt.
As a country heavily reliant on imports, Egypt has been struggling with rising prices of goods and services due to an increase in the dollar price and a decrease in the pound, as well as difficulties in providing dollar flows. The first review of a $3 billion IMF loan program, initially scheduled for mid-March, has also been delayed.
Since the end of last year, the CBE has committed to adopting a flexible exchange rate, which is one of the conditions of the country’s agreement with the IMF to prevent foreign reserves from being eroded by currency subsidies.
Egypt has cut its currency three times in about a year, and it currently stands at nearly 31 pounds on the official market, much higher on the black market.
The North African country reached an agreement with the IMF last December to obtain a new $3 billion loan, but only one tranche worth $347 million has been disbursed so far. The two parties are currently in consultation over Egypt’s first review date, which is scheduled for March. The IMF has called on Egypt to accelerate agreed measures, including the flexibility of the exchange rate, the restructuring of government companies, and the strengthening of the private sector’s role in the economy.
The value of foreign reserves in June is the highest level recorded since the beginning of this year. The previous records for 2023, according to Central Bank data, were $34.224 billion in January, $34.352 billion in February, $34.447 billion in March, $34.551 billion in April, and $34.660 billion in May.
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