Egypt’s net international reserves stood at $39.2 bln by November end: CBE
The World Bank is seeing Egypt the top recipient of remittances in the Middle East and North Africa region in 2020 to receive $24.4 billion
Egypt’s net international reserves (NIRs) stood at $39.2 billion at the end of November, the same level it reached in October, according to the Central Bank of Egypt.
In the beginning of November, the CBE announced that Egypt’s NIRs witnessed a slight increase in October to reach $39.2 billion, up from $38.4 billion recorded in September.
In September 2019, Egypt’s NIRs recorded an all-time high of $45.117 billion; before witnessing a significant drop in March 2020, reaching $40 billion, driven by the unprecedented blow to global financial markets arising from the COVID-19 pandemic.
COVID-19 has caused the sharpest portfolio flow reversal on record from emerging markets, including the Egyptian market, according to the CBE.
Egypt’s NIR is expected to surge to $43 billion in 12 months’ time, according to Trading Economics (TE).
In the long-term, TE expects Egypt’s NIR to trend around $45 billion in 2021 and about $46 billion in 2022.
Egypt is expected to receive the second tranche of the stand-by agreement loan approved by the International Monetary Fund (IMF) in December.
In June, Egypt was handed the first tranche, worth $2 billion out of $5.2 billion, while it is expected to receive $3.2 billion after reviews that are anticipated to be carried out in December 2020 and June 2021.
According to a recent report, the World Bank expects Egypt to become the top recipient of remittances in the Middle East and North Africa region in 2020 to receive $24.4 billion, which accounts for 6.7 percent of the country’s GDP.
In December, the CBE revealed in a report that Egypt’s tourism revenues dropped by $2.7 billion in FY2019/2020, reaching $9.9 billion driven by the decline in the travel receipts and, accordingly, the drop in the services surplus by 31.2 percent to reach $9 billion in FY2019/2020, down from $13 billion in FY2018/2019.
On Thursday, Fitch Ratings said in a report that Egypt’s banking sector’s exposure to the most affected trade and services sectors, including tourism, transportation and the Suez Canal, accounted for about 27 percent of the total loans (23 percent of GDP) at the end of 2019.
It also expects that lower foreign currency receipts will constrain foreign currencies borrowers’ debt service capacity, saying that foreign currency lending accounts for around a quarter of total sector loans.
On the other hand, the World Bank expects that Egyptian expat remittances could reach $24.4 billion by the end of 2020 (6.7 percent of GDP), despite the challenges imposed by COVID-19.
