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Egypt’s Net Foreign Assets Decline Sharply

Egypt’s Net Foreign Assets Decline Sharply

Monday, 4 April, 2022 - 10:00
Central Bank of Egypt's headquarters is seen in downtown Cairo, Egypt March 8, 2016. REUTERS/Mohamed Abd El Ghany

Egypt’s Central Bank data showed on Sunday that the country’s net foreign assets (NFAs) went sharply negative in February, declining by 60 billion Egyptian pounds ($3.29 billion) to minus 50.3 billion pounds, for the fifth consecutive month.

The shortage of foreign currency helped prompt the central bank to devalue the pound by 14 percent on March 21. The value of NFAs at the end of September amounted to 186.3 billion pounds.

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.

Analysts say that any movement may represent a change in the flow of imports or exports, the outflow of foreign portfolios, external debt repayment, changes in the flow of workers’ remittances, or a slowdown in tourism.

The Central Bank said on March 14 that remittances from Egyptians abroad increased to $31.5 billion in 2021 from $29.6 billion a year earlier. Net foreign reserves also rose to $40.994 billion in February from $40.98 billion in January.

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