US economy contracts in Q1 '25    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    EGP closes high vs. USD on Wednesday    Germany's regional inflation ticks up in April    Taiwan GDP surges on tech demand    Germany among EU's priciest labour markets – official data    UNFPA Egypt, Bayer sign agreement to promote reproductive health    Egypt to boost marine protection with new tech partnership    Eygpt's El-Sherbiny directs new cities to brace for adverse weather    CBE governor meets Beijing delegation to discuss economic, financial cooperation    Egypt's investment authority GAFI hosts forum with China to link business, innovation leaders    Cabinet approves establishment of national medical tourism council to boost healthcare sector    Egypt's Gypto Pharma, US Dawa Pharmaceuticals sign strategic alliance    Egypt's Foreign Minister calls new Somali counterpart, reaffirms support    "5,000 Years of Civilizational Dialogue" theme for Korea-Egypt 30th anniversary event    Egypt's Al-Sisi, Angola's Lourenço discuss ties, African security in Cairo talks    Egypt's Al-Mashat urges lower borrowing costs, more debt swaps at UN forum    Two new recycling projects launched in Egypt with EGP 1.7bn investment    Egypt's ambassador to Palestine congratulates Al-Sheikh on new senior state role    Egypt pleads before ICJ over Israel's obligations in occupied Palestine    Sudan conflict, bilateral ties dominate talks between Al-Sisi, Al-Burhan in Cairo    Cairo's Madinaty and Katameya Dunes Golf Courses set to host 2025 Pan Arab Golf Championship from May 7-10    Egypt's Ministry of Health launches trachoma elimination campaign in 7 governorates    EHA explores strategic partnership with Türkiye's Modest Group    Between Women Filmmakers' Caravan opens 5th round of Film Consultancy Programme for Arab filmmakers    Fourth Cairo Photo Week set for May, expanding across 14 Downtown locations    Egypt's PM follows up on Julius Nyerere dam project in Tanzania    Ancient military commander's tomb unearthed in Ismailia    Egypt's FM inspects Julius Nyerere Dam project in Tanzania    Egypt's FM praises ties with Tanzania    Egypt to host global celebration for Grand Egyptian Museum opening on July 3    Ancient Egyptian royal tomb unearthed in Sohag    Egypt hosts World Aquatics Open Water Swimming World Cup in Somabay for 3rd consecutive year    Egyptian Minister praises Nile Basin consultations, voices GERD concerns    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



S&P expects Egypt's foreign reserves to fall to $37 billion by June-end amid coronavirus
Published in Amwal Al Ghad on 19 - 04 - 2020

Rating agency S&P has forecast on Friday Egypt's foreign exchange reserves – including gold – would decline to about $37 billion by the end of current financial year that ends on June 30.
S&P warned that the coronavirus pandemic would cause a sharp decline in Egypt's economic activity and current account receipts, while large capital outflows are weighing on foreign exchange reserves.
"We expect foreign exchange reserves (including gold) will decline from a high of $45.5 billion at end-February to about $37 billion by the end of fiscal 2020 (year ending June 30, 2020) and remain broadly stable at about this level in fiscal 2021, covering about five-to-six months of current account payments."
The rating agency also said in its report it expects a substantial decline in the current account receipts (CARs) during final-quarter of the current financial year and during the first half of the following year.
"The decrease comes on the back of a COVID-19-induced shutdown of tourism (which represents about 16 percent of CARs) since March, as well as lower merchandise exports and Suez Canal receipts following a slowdown in global trade, and a drop in remittances from the Gulf-based diaspora."
At the same time, S&P said the global financial market volatility has led to large capital outflows from emerging markets, including Egypt.
"We understand there were portfolio outflows of $13 billion in March (nearly 50 percent of total foreign investment in treasury bills and bonds), which resulted in a decline of the Central Bank of Egypt's (CBE) foreign exchange reserves and domestic banks' foreign assets."
Amid these external pressures, foreign exchange reserves declined by $5.4 billion in March, while the currency exchange rate remained largely stable, indicating the Egyptian central bank's intervention, in S&P's view.
"We anticipate the CBE will continue to gently shore up the currency to manage inflationary pressures and maintain financial stability. Potentially greater currency intervention would further weigh on foreign exchange reserves, and currency overvaluation could limit the recovery in non-oil exports and services receipts."
"We assume the CBE will not implement capital controls, given its buffers."


Clic here to read the story from its source.