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Egypt's FX reserves increase by $319m in November Gold reserves decline, SDR countered FX hike, curbing net foreign reserves increase to $107m in November, according to CBE
The Central Bank of Egypt (CBE) said that foreign currencies (FX) reserves included in its net foreign reserves increased by $319m in November, recording $41.930bn, up from $41.611bn in October. Most of Egypt's FX reserves consist of the US dollar, the euro, the pound sterling and the Japanese yen. On Tuesday evening, the CBE disclosed that Egypt's net foreign reserves rose by $107m to record, $45.354bn in November, compared to $44.247bn a month earlier. Egypt's net foreign reserves consist of FX, gold, special drawing rights (SDRs), and net IMF loans. The current levels of foreign reserves levels are the highest on record in Egypt's history, covering more than eight months of commodity imports. However, the CBE indicated that the hike in FX reserves was countered by a decline in gold reserves which fell by $119m to register $3.148bn in November. Additionally, a similar decline in SDRs offset the increase net reserves, as they dropped by $92m to record $277m in November, compared with $369m in October, while the share of the IMF loans stabilised at $4m in November. Reserves have been climbing since Egypt floated the currency and clinched a $12bn three-year deal with the International Monetary Fund in November 2016 in a bid to lure back foreign investors. Governor of the CBE Tarek Amer estimated the volume of such inflows since November 2015 at about $200bn. The size of a country's reserves represents a source of strength or weakness according to its value and ability to meet the country's foreign exchange obligations. Egypt roughly had $36bn in reserves before an uprising in 2011 ushered in a period of political turmoil, scaring away tourists and foreign investors, Egypt's key sources of hard currency. Afterwards, Egypt's net foreign reserves hit a historic low in October 2016, with only $19bn. The resources of the Suez Canal Authority, tourism, export, foreign investment, and remittances of workers abroad are the most important resources for Egyptian reserves.
