Egypt Watch

Central Bank of Egypt announces a 19% drop in foreign exchange reserves during the first seven months of 2022

On Sunday, the Central Bank of Egypt announced a 19% drop, equivalent to $7.8 billion, in foreign exchange reserves during the first seven months of 2022.

The country’s net foreign reserves decreased for the fifth consecutive month by about two billion dollars, to reach 33.4 billion dollars last month, compared to 40.93 billion dollars last December.

The Central Bank announced last month that foreign exchange reserves decreased by $2.12 billion in June, compared to $1.63 billion in May. It revealed last April that net reserves declined by about $3.912 billion after dropping from $40.994 billion, in February, to about $37.082 billion, in March. In April, it also announced that the external debt rose by 22 billion dollars in one year, recording 145 billion and 529 million dollars in December 2021, compared to 123 billion and 490 million dollars in December 2020.

The International Monetary Fund had called on Egypt to make decisive progress in financial reforms, greater flexibility in the pound exchange rate, enhancing the competitiveness of the private sector while reducing the state’s role in the economy, and improving governance. In the final review of the credit preparedness program, which Egypt concluded in 2020 to obtain $5.2 billion from the fund, the executive board of the fund stressed that Egypt is still vulnerable to external shocks due to the high public debt burden and sizeable overall financing requirements.