Egypt’s forex reserves rise for 12 consecutive months

REUTERS/Aziz Taher

Egypt’s foreign reserves rose to $34.92 billion in August 2023, recording an increase for 12 consecutive months.

The reserves recorded a 5.4 percent increase year on year last month, Egypt Today newspaper reported, citing statistics from the central bank.

The reserves stood at $34.87 billion in July, comprising the US dollar, Euro, Australian dollar, Japanese yen and Chinese yuan.

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Egypt is seeking to receive new external financing of between $1.5 and $2 billion, finance minister Mohamed Maait said, with $1 billion expected to come through Japanese Samurai and Chinese Panda bond offerings by year-end.

Net foreign asset deficit contracted by $807.95 million, close to three percent month on month, to $26.34 billion in July 2023.

Net foreign asset deficit is the net total value of foreign assets owned by the country’s banks minus their foreign liabilities.

The report said that total assets grew by 50 percent year on year to hit $145 billion in July.

Egypt’s M1 money supply, which includes currency in circulation and local currency demand deposits, rose by an annual 33.1 percent in the year to end-July, down from an annual increase of 33.4 percent in June.

M2 money supply, which in addition to M1 includes local currency time and savings deposits and foreign currency deposits, rose by 24.4 percent year-on-year in June.

A rapid acceleration in money supply risks fuelling Egypt’s inflation. It hit an all-time high of 36.5 percent in July, and puts further pressure on the currency, which has fallen by half against the dollar over the last 18 months, analysts told Reuters.