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Egypt’s net foreign assets retreat further into the red

Egypt’s net foreign assets (NFAs) dropped by 169.7 billion Egyptian pounds ($9.17 billion) in March, the sharpest decline since the coronavirus crisis broke out in February 2020, central bank data showed on Sunday.

NFAs fell to a negative 221.3 billion pounds at the end of March from a negative 51.69 billion pounds a month earlier. It was their sixth month of declines from a positive 186.3 billion pounds at the end of September 2021.

An outflow of foreign currency, triggered in part by investor unease following Russia’s invasion of Ukraine, was among factors which prompted the central bank to devalue the pound by 14 percent on March 21.

NFAs represent banking system assets owed by non-residents minus liabilities. Changes in their size represent net transactions of the banking system with the foreign sector, including those of the central bank, according to the bank.

Any movement could represent changes in import or export flows, foreign portfolio outflows, repayment of foreign debt, changes in the flow of worker remittances or a slowdown in tourism, analysts said.