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Egypt’s Net Foreign Reserves Rise to $45Bn

Egypt’s Net Foreign Reserves Rise to $45Bn

Thursday, 5 September, 2019 - 10:30
Stacks of money are pictured as an employee counts them at a bank in Cairo September 4, 2014. REUTERS/Asmaa Waguih

Egypt’s net foreign reserves rose to $44.969 billion last August from $44.916 billion last July, said the central bank of Egypt on Wednesday.

Egypt faces a difficult repayment schedule for the next two years, and it is trying to increase its investor base and extend its debt payment plan with less interest.

Its total foreign debt has amounted to $106.2 billion by the end of March, up from $96.6 billion late 2018.

On the other hand, Executive Chairman of Egypt’s Stock Exchange Mohamed Farid Saleh said the financial market targets attracting two new shares and applying the short-selling mechanism before the end of the year.

Saleh said the market also looks forward to continue in its path as one of 2019's best performing emerging stock markets.

Egypt has benefited from a huge wave of foreign investment since the government embarked on a series of reforms in 2016 linked to a $12 billion IMF loan.

Reforms have included the introduction of a value-added tax, deep cuts to energy subsidies and a currency devaluation.

Egypt's stock market has risen more than 15 percent year to date, compared with a 0.8 percent slump in the MSCI Emerging Markets Index.

“You wouldn't find many countries that have such a complete story as Egypt in terms of the macro-economic reforms that took place,” Saleh told Reuters. “The reform story has been important for foreign investors.”

Foreigners, who account for around 35 percent of trading on the exchange, have been net purchasers of nearly 50 billion Egyptian pounds ($3 billion) of securities since the reforms began in 2016, compared with less than 10 billion Egyptian pounds in the three years before the reforms, he said.

They have also snapped up 31 billion Egyptian pounds of local bonds listed on the exchange, compared with one billion before 2016.

The exchange was in talks with two companies, a garments firm and a technology business, expected to list before the end of the year.

Saleh pointed out that a third company within the financial sector, owned by the state, was likely to be listed at some point, but the timing would be determined by a political decision.

He acknowledged that there had been some delays in the IPO, adding that it's a lengthy process and is taking more time than expected.

The state has been seeking to list some of the companies it owns as part of an effort to clear room in the economy for private sector growth.

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