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Saudi Deposit Promotes Stability of Egypt’s Foreign Exchange Market

The Saudi move comes following the recent devaluation of the Egyptian pound. (Photo: AFP)
The Saudi move comes following the recent devaluation of the Egyptian pound. (Photo: AFP)
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Saudi Deposit Promotes Stability of Egypt’s Foreign Exchange Market

The Saudi move comes following the recent devaluation of the Egyptian pound. (Photo: AFP)
The Saudi move comes following the recent devaluation of the Egyptian pound. (Photo: AFP)

With Saudi Arabia’s announcement of a $5 billion deposit with the Central Bank of Egypt on Wednesday, sources told Asharq Al-Awsat that this move would enhance the stability of the foreign exchange market and consolidate the Egyptian economy amid severe pressure on the Egyptian pound.

In a statement published by the Saudi Press Agency (SPA), Riyadh said that the deposit comes as “an extension of the well-established historical ties and close bonds of cooperation between the Kingdom of Saudi Arabia and the sisterly Arab Republic of Egypt, and an affirmation of the depth of the deep-rooted relations.”

The SPA added that the Kingdom - in implementation of the directives of Custodian of the Two Holy Mosques King Salman bin Abdulaziz and Crown Prince Mohammed bin Salman - deposited $5 billion with the Central Bank of Egypt, confirming the distinguished bilateral ties at all levels.

Meanwhile, Egyptian Prime Minister Mostafa Madbouly held a meeting on Wednesday with Dr. Essam bin Saeed, Saudi Minister of State for Shura Council Affairs, and his accompanying delegation.

The Cabinet said in a statement that the governments of Egypt and Saudi Arabia had signed an agreement for the Saudi Public Investment Fund to invest in Egypt.

According to the statement, the agreement aims to encourage the Saudi PIF to invest in Egypt and contribute to achieving the country’s goals in attracting investments in foreign currencies. The total volume of trade exchange between Saudi Arabia and Egypt in 2020 exceeded about $5.5 billion, and rose to $7.5 billion this year.

Bin Saeed pointed to large investment opportunities that would be presented to the Egyptian market through Egypt’s sovereign fund or partnership with the private sector.

Observers told Asharq Al-Awsat that the Saudi move came following the recent devaluation of the Egyptian pound against the US dollar and other challenges, including fears of shortage and increasing prices of basic commodities, especially wheat and grain, as well as high oil prices that affect the state budget.

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Saudi Trade Surplus Hits 10-Month High as Imports Decline

King Abdulaziz Port in Dammam, Eastern Saudi Arabia (Asharq Al-Awsat)
King Abdulaziz Port in Dammam, Eastern Saudi Arabia (Asharq Al-Awsat)
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Saudi Trade Surplus Hits 10-Month High as Imports Decline

King Abdulaziz Port in Dammam, Eastern Saudi Arabia (Asharq Al-Awsat)
King Abdulaziz Port in Dammam, Eastern Saudi Arabia (Asharq Al-Awsat)

Saudi Arabia posted its highest trade surplus in 10 months in February, buoyed by a sharp drop in merchandise imports, a trend that supports state revenues, bolsters currency stability, and reflects strong global demand for locally produced goods.

The Kingdom recorded a trade surplus of 31 billion riyals ($8.26 billion) in February, up 44.6% from 21 billion riyals in January and higher than the 29 billion riyals recorded in the same month last year, data from the General Authority for Statistics showed.

The surge came despite a slight dip in exports, as merchandise imports fell by 5.6% month-on-month to 63 billion riyals ($16.7 billion) — the lowest level since late 2023. Meanwhile, merchandise exports stood at 94 billion riyals ($18.3 billion), down from 97 billion riyals in January.

Saudi Arabia’s non-oil exports, including re-exports, rose 14.3% year-on-year in February to 26 billion riyals ($6.9 billion), up from 23 billion riyals in the same month last year, driven by ongoing efforts to boost domestic industry and global market access.

The growth comes as the Kingdom steps up its “Made in Saudi” initiative, aimed at helping local companies expand operations, tap new customer bases, and market their products to a wider audience. The program is part of Riyadh’s broader push to diversify the economy and reduce reliance on oil.

Trade experts say the rise in exports relative to imports is supported by a mix of financial incentives, export facilitation, and expanded logistics infrastructure across air, land and sea.

China remained Saudi Arabia’s largest export destination in February, accounting for 16.2% of total exports. South Korea followed with 10.1%, and the United Arab Emirates came third with 9%.

Dr. Fawaz Alamy, an international trade expert, told Asharq Al-Awsat that the trade surplus reflects the Kingdom’s successful policies to stimulate the private sector and boost the competitiveness of national products abroad. He said recent regulatory reforms have eliminated key obstacles for exporters and helped create entities that support global expansion.

He added that government agencies are working closely with the private sector by providing consulting services, financing, and market targeting strategies to facilitate international trade.

“Saudi Arabia’s non-oil activities are now growing steadily and contributing more than 50% to GDP,” Alamy said, noting this aligns with Vision 2030 goals to build a diversified and thriving economy.

Economic analyst Ahmed Al-Shehri echoed the sentiment, saying February’s trade surplus highlights the success of government collaboration in enhancing the export environment, overcoming exporter challenges, and improving export-related knowledge and talent.

He added that authorities continue to support the private sector and create an attractive environment for local and foreign investment. “In recent years, the government has worked to understand and remove the challenges facing domestic companies to ensure they can drive economic growth,” Al-Shehri said.

He noted that the non-oil sector’s contribution to GDP is now around 50%, adding: “Government agencies are actively helping manufacturers and exporters identify global market opportunities and deliver tailored support.”