Egypt’s foreign assets shrink after March IMF boost

Egypt’s net foreign assets (NFAs) fell by $1.5 billion in April, reversing a sharp rise seen in March.

Central bank data released Wednesday showed NFAs declining to $13.54 billion from $15.08 billion the previous month, based on Reuters calculations.

The March surge followed the IMF’s approval of the fourth review of Egypt’s $8 billion reform programme and the release of $1.2 billion.

The IMF also greenlit a $1.3 billion arrangement under its resilience and sustainability facility, boosting investor confidence.

That move triggered a wave of foreign investment into Egyptian pound-denominated treasury bills, according to banking sources.

Despite the April drop, both central and commercial banks posted higher foreign asset holdings, while foreign liabilities decreased.

Egypt has leaned on foreign assets to support its currency since late 2021, amid prolonged economic strain.

NFAs had dipped into negative territory in February 2022 but returned to the positive zone by May 2023.

The recent fluctuation underscores the country’s delicate balancing act between attracting foreign capital and managing its external obligations.

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