Egypt's net foreign assets decline by USD1.12B in October

(MENAFN) Egypt's net foreign assets experienced a decline of USD1.12 billion in October, reversing the increase seen in September, according to data released by the central bank. The net foreign assets dropped to USD9.21 billion at the end of October, down from USD10.33 billion at the end of September. This shift follows a USD591 million rise in September, marking a notable fluctuation in the country’s foreign asset position.

The decrease in net foreign assets is part of an ongoing strategy by Egypt to utilize these reserves to support the Egyptian pound. This approach has been in place since September 2021, allowing the central bank and commercial banks to manage the currency's stability amid economic challenges. Despite these efforts, net foreign assets have generally been under pressure, with a significant decline observed in February 2022 and only limited recovery beginning in May 2023.

October's figures reveal a divergence in the performance of foreign assets between the central bank and commercial banks. While the central bank’s foreign assets saw an increase, those held by commercial banks recorded a decline. This variation suggests differing pressures or strategies being employed by these financial institutions in managing their foreign exchange positions.

Meanwhile, the foreign liabilities of both the central bank and commercial banks rose during October. This increase in liabilities highlights growing financial obligations in foreign currency, further contributing to the challenges facing Egypt’s foreign asset management and currency stability. The interplay between rising liabilities and fluctuating assets continues to shape the country's financial outlook.

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