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Gold value in FX reserves up $153m in December This reserve level is the highest ever in the history of Egypt, and covers more than 8 months of commodities' imports to Egypt.
The value of the gold balance included in the foreign exchange reserves of Egypt increased by $153m in December 2019, to reach $3.301bn up from $3.148bn during the previous month of November. On Sunday, the Central Bank of Egypt (CBE) said that foreign exchange reserves increased by $64m to reach $45.419bn by the end of December 2019, compared to $45.354bn by the end of November. This reserve level is the highest ever in the history of Egypt, and covers more than 8 months of commodities' imports to Egypt. According to the detailed data on the reserve balance, the foreign currencies reserves decreased to $41.84bn at the end of December, compared to $41.93bn in November. The balance of special drawing rights at the end of December rose to $280m versus $278m in November, and the balance of the International Monetary Fund loans reached $3m in December, compared to $4m in November. The foreign exchange reserves at the CBE recorded unprecedented levels during 2019, as it jumped about $3bn to reach $45.419bn at the end of the year, compared to $42.61bn in January 2019. The decision to liberalise the exchange rate contributed to the increase in foreign exchange reserve balances, as it increased from about $19.5bn at the end of October 2016, achieving an increase of more than $25.5bn. Egypt's access to strong cash flows, and loans from abroad contributed to an increase in the reserves, most notably $12bn from the International Monetary Fund. According to Tarek Amer, Governor of the CBE, the volume of foreign exchange inflows reached about $200bn since the decision to liberalise the exchange rate until June 2019. Egypt's reserves consist of foreign currencies, gold, special drawing rights units, and net IMF loans. The aim of the reserve is to support the currency, fulfill the country's foreign obligations and guarantee its imports of basic commodities for several months. Most of the Egyptian reserves consist of the US dollar, the euro, the British sterling pound, and the Japanese yen. The size of the reserves of any country represents a source of strength or weakness according to its value and its ability to meet the country's foreign exchange obligations. The resources of the Suez Canal Authority, tourism, export, foreign investment, and remittances of workers abroad are the most important resources for the reserves in Egypt.
