Egypt’s net foreign assets recorded the first surplus in over two years in May at $14.3 billion, up from April’s $3.7 billion deficit, revealed the latest Central Bank of Egypt (CBE) data. Egypt’s net foreign assets have witnessed an exponential recovery in recent months after reaching an almost record high of $30 billion earlier this year.
Since February 2022, the country’s net foreign assets have been in a deficit amid regional Russia-Ukraine tensions, foreign investor outflows, and local and global political uncertainty.
Investments boost banking sector
Foreign assets in Egypt’s central bank recorded a surplus of $9.7 billion in May, up from a deficit of $763 million in April. Thus, foreign assets in the central bank rose by $4.8 billion, while foreign liabilities declined by $5.6 billion.
Meanwhile, commercial banks in the country saw their net foreign assets rise to a surplus of $4.6 billion, a significant growth from April’s $2.9 billion deficit. Commercial banks saw their foreign assets rise by $6.9 billion, while foreign liabilities declined by $625 million during the same period.
In May, Egypt received the second and final tranche of the Ras El Hikma agreement in addition to a significant influx of foreign funds, which supported the recovery of its net foreign assets.
On the other hand, Egypt’s net foreign liabilities hit a record high of $29 billion in January. However, measures like currency floatation and the Ras El Hikma mega investment contributed to the decline in the government’s liabilities.
International reserves reach record-high
Egypt’s net foreign assets have risen by $43 billion since January due mainly to international support, especially the $35-billion mega investment from the UAE. However, the data also suggests that investment inflows are back.
Egypt saw pledges of around $57 billion in addition to the UAE deal which boosted Egypt’s net international reserves to a record high of $46.1 billion in May.