In November, foreign exchange reserves in Egypt increased for the sixth consecutive month, with a 1.8 million dollar increase over the previous month, to record 39.2 billion dollars by the end of November 2020.
The foreign exchange reserves are expected to witness a significant recovery in the coming period, following the recent statement of Finance Minister Mohamed Maait, which stated that the government will receive the second tranche of the IMF loan, totaling one billion and 600 million dollars, during the second half of December.
According to a statement issued by the Central Bank, payments by Egyptians working abroad increased 7.5%, to record 14.1 billion dollars during the second half of the 2019/2020 financial year, compared with 13.1 billion dollars in the period relative.
The balance of the non-oil balance decreased by about 566.8 million dollars, to record around 18.1 billion dollars, due to a 2% decrease in imports of non-oil goods, to 26.8%.
Exports of non-oil goods also increased to reach 8.7 billion dollars, and the balance of the oil trade turned to a surplus of 313.2 million dollars, compared with a deficit of 142.2 million dollars.
Foreign currencies in Egypt’s foreign reserves include a basket of the major international currencies, namely the US dollar, the single European currency (the euro), the British pound, the Japanese yen and the Chinese yuan. According to a plan drawn up by officials of the Central Bank of Egypt.
The central function of the foreign exchange reserves in the Central Bank, with its various components of gold and international currency, is to provide basic goods, pay installments and interest on foreign debt, and to face economic crises, in exceptional circumstances, with the resources from hard money-producing sectors, such as exports, tourism and investments, that will be affected. Due to the unrest, other hard-earned sources of funding, such as record-breaking payments from Egyptians abroad, and the revenue stability of the Suez Canal, contribute to supporting the reserves in a matter of months.
It is worth noting that the country’s foreign exchange reserves reached $ 45.5 billion at the end of last February, and about $ 9.5 billion of this result was used to address the after-effects of the Corona virus crisis that is emerge, after the shock to which the main sources of foreign exchange were exposed.
The reserve lost about $ 5.4 billion in March, then lost about $ 3.1 billion in April, then dropped $ 1 billion in May, despite selling $ 5 billion in bonds and receiving a quick financing loan from the International Monetary Fund worth $ 2.77 billion a month before last.
To compensate for this shortfall, the government turned to borrowing from the International Monetary Fund twice this year, and the loan totaled $ 2.8 billion for the first time. It is a short-term loan that is due for repayment after only one year.
Although the second loan was worth $ 5.2 billion, with a duration of 12 months, it aims to help Egypt cope with the consequences of the Coronavirus pandemic, and fill the budget deficit and balance of payments.
Egypt sold $ 5 billion in bonds on international markets in May as part of measures to support the economy during the Coronavirus pandemic.
On September 30, Egypt sold green dollar bonds for the first time in its history, worth 750 million dollars, for a period of 5 years.
The following is a statistic prepared by the “Masr Al-Arabia” website for the movement of foreign exchange reserves in the period January to November 2020.
January: $ 45.457 billion
February: $ 45.509 billion
March: $ 40.108 billion
April: $ 37.037 billion
May: $ 36.004 billion
June: $ 38,201 billion
July: $ 38.315 billion
August: $ 38.366 billion
September: $ 38.425 billion
October: $ 39.220 billion
November: $ 39.2 billion