Egypt’s financial situation continues to improve as the country reported its second consecutive month of positive net foreign assets (NFAs) in June.
This marks a significant turnaround after enduring deeply negative NFAs for over two years.
Central bank data reveals that NFAs declined slightly from 676.4 billion Egyptian pounds in May to 626.6 billion pounds in June.
While this represents a decrease, it’s crucial to note that the figure remains positive, equivalent to approximately $13.05 billion.
Egypt has relied heavily on its NFAs to stabilize its currency since September 2021.
However, these assets turned negative in February 2022, putting immense pressure on the economy.
A series of strategic moves by the government has contributed to the recent positive trend. In February 2023, the sale of development rights for Ras El Hekma on the Mediterranean coast generated a substantial $35 billion.
Additionally, a $8 billion financial support package secured from the International Monetary Fund in March provided a much-needed boost.
The government’s decision to sharply devalue the Egyptian pound has also had a positive impact, attracting significant portfolio investments and remittances from Egyptians working abroad.
Despite the overall positive trend, the data indicates that foreign assets at commercial banks decreased in June, while increasing at the central bank.
Conversely, foreign liabilities rose at both commercial banks and the central bank.