Egypt's net foreign reserves were $35.1 billion in May, up from $34.65 billion a month earlier, state-run daily Al-Ahram said on Saturday citing a central bank report. Reserves came in at $31.10 billion in April 2009, reported Reuters. In a meeting with the Prime Minister, Central Bank of Egypt Governor said that the monetary and banking situation in Egypt was stable despite the global crisis and the recent Greek debt crisis, reported local newspapers. The Governor indicated that the Egyptian pound was at its strongest, rising against the euro by 14 percent in recent months, while weakening against the US dollar by 16-17 percent. The stability, he said, stemmed from the CBE's predictability of the European crisis and being conservative in the management of its foreign reserves, according to Beltone Financials' daily market report. The overall balance of payments registered a surplus of $3.1 billion in the nine months ending March, and capital flows recovered to their pre-crisis levels. Tourism indicators are improving as are revenues from exports workers abroad and the Suez Canal, Beltone cited the Governor as saying. The Cairo-based investment firm said it expects further weakening in the Egyptian pound versus the US dollar in the coming period, based on movements in the USD/Euro rate, as one of the main determinants of the EGP/USD rate. “We expect, however, the pace of weakening to decelerate as the increased supply of foreign currency increases in Egypt in the summer months, given the moderate demand from the business sector,” Beltone said. “The firm said the EGP/USD rate could possibly slide to 5.70 – 5.75, depending on the duration and nature of the EU debt crisis, pulling back once international FX markets calm and the weakness in the euro caused by excess panic on investors' part subsides and the increased supply materializes in the local market,” the report concluded.
