The Central Bank of Egypt (CBE) announced on Thursday that its Net International Reserves (NIR) declined to $37bn in April compared to $40,1bn in March. The CBE said that global markets remain under pressure due to the persistence of the COVID-19 pandemic which continues to drive portfolio flow reversals from emerging markets, albeit with a slower pace than the previous month in which the peak was witnessed. The Egyptian market was no different, and for this reason, the CBE continues to cover the legacy CBE FX repatriation mechanism flows as they exit the market in a seamless manner. Additionally, the CBE drew on its reserves to uninterruptedly honour, as it always has, all of its external obligations amounting to around $1.6bn, of which was the maturity of the 2020 Eurobond worth of $1bn. The reserves were also utilised in order to cover strategic goods necessary to ensure the wellbeing of the population. During this month, the CBE and the government have also taken strong, affirmative action to preserve the achievements of the Egyptian economy by approaching the International Monetary Fund (IMF) in order to secure a Rapid Financing Instrument (RFI) and a Stand-By Arrangement (SBA). The CBE noted that this RFI will allow the Egyptian government to address any immediate shortfalls in the balance of payments while supporting the most affected sectors and the most vulnerable segment of society. However, this engagement with the IMF would not have materialised had it not been for the successful implementation of the homegrown reform programme and relentless efforts to ensure sustainable growth. The CBE stands ready to take all necessary measures to preserve the stability of the Egyptian economy under the current exceptional and globally unprecedented circumstances.
