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Egypt's Net Foreign Assets Drop by $1.3 Bln in February

The headquarters of the Central Bank of Egypt in the capital, Cairo. (Reuters)
The headquarters of the Central Bank of Egypt in the capital, Cairo. (Reuters)
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Egypt's Net Foreign Assets Drop by $1.3 Bln in February

The headquarters of the Central Bank of Egypt in the capital, Cairo. (Reuters)
The headquarters of the Central Bank of Egypt in the capital, Cairo. (Reuters)

Egypt's net foreign assets (NFAs) declined by 49.8 billion Egyptian pounds in February as pressure on the currency continued to build.

The second drop in as many months took NFAs to a negative 704.23 billion Egyptian pounds from minus 654.43 billion at the end of January, the Central Bank of Egypt data showed.

That equates to a February decline of $1.31 billion using end-of-month central bank exchange rates, Reuters calculations show.

The central bank allowed the Egyptian pound's official price to depreciate against the dollar by 1.4% in February.

The official exchange rate on Sunday was 30.9, while street dealers were offering to buy dollars for 36 pounds, down from 35 last week.

NFAs, which represent banking system assets owed by non-residents minus liabilities, have helped the central bank to support Egypt's currency over the past 18 months.

Egypt's NFAs had stood at a positive 248 billion pounds in September 2021, before the decline began.

Meanwhile, the National Bank of Egypt (NBE) and Banque Misr have recently issued two new certificates of deposit (CDs) with fixed yields of 19% and a decreasing yield of 22%.

The first certificate is fixed for three years at a rate of 19% annually, and the return is paid monthly. The other CD has a decreasing yield of 22%, disbursing a yield of 22% over the first year, 18% over the second year, and 16% over the third year, according to the Middle East News Agency (MENA).

The issuance of these certificates reflects the positive outlook of a drop in interest rates in the coming period and a gradual decline in inflation amid stability in the markets, added MENA.

Moreover, the central bank announced on Thursday that the Monetary Policy Committee (MPC) decided to raise key policy rates by 200 bps.

In its meeting, the overnight deposit rate, overnight lending rate, and the rate of the main operation were raised by 200 bps to 18.25%, 19.25%, and 18.75%, respectively.

Meanwhile, Egyptian Exchange (EGX) indexes posted collective gains at the close of Sunday's trading session.

The market capital gained about 18 billion pounds to close at 1.067 trillion pounds, amid transactions that totaled 2 billion pounds.

The EGX 30 benchmark index was up by 1.68%, registering 16,694.46 points.

The broader EGX 70 EWI index of the leading small and mid-cap enterprises (SMEs) increased by 1.41%, ending at 2,846.98 points.

The all-embracing EGX 100 index rose by 1.63%, closing at 4,301.27 points.

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China Eyes Electric Vehicle Manufacturing Opportunities in Saudi Arabia

Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
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China Eyes Electric Vehicle Manufacturing Opportunities in Saudi Arabia

Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)

China’s ambassador to Saudi Arabia, Chang Hua, expressed Beijing’s hopes to strengthen its partnership with the kingdom, especially in electric vehicle production and other industries.
Speaking to Asharq Al-Awsat, Hua condemned violations of Lebanon’s sovereignty and the targeting of civilians.
He called for immediate action to reduce tensions and prevent further escalation in the region.
“China is deeply shocked by the high civilian casualties from the conflict between Israel and Lebanon,” Hua said, urging the international community to work on calming the situation.
He emphasized that, no matter how things unfold, “China will always stand for justice and remain committed to peace and stability in the Middle East. We are ready to work with all parties to promote peace in the region.”
China’s Economic Growth
Hua highlighted China’s rise from a $30 billion economy to a $17.8 trillion one, making it the world’s second-largest economy and a leader in trade and industry.
He reiterated China’s goal to maintain high-level openness, push for high-quality economic development, and promote a multipolar world with fair global governance and inclusive economic globalization.
Saudi-China Relations
Hua described the partnership between Saudi Arabia and China as entering a new phase of deep development, congratulating Saudi Arabia on its 94th National Day.
He noted that Chinese Premier Li Qiang’s recent visit to Saudi Arabia has boosted bilateral relations and strengthened the comprehensive strategic partnership, driving it towards a more stable and prosperous future.
The ambassador stressed the need to expand trade and investment between the two countries and highlighted the upcoming “Saudi-Chinese Cultural Year 2025” as a key event.
Hua also pointed out that Saudi Crown Prince Mohammed bin Salman values the strong and historic relationship between the two nations.
The Crown Prince looks forward to further aligning Saudi Vision 2030 with China’s Belt and Road Initiative, expanding cooperation in energy, investment, and culture.
Hua noted that China is Saudi Arabia’s largest trading partner, with bilateral trade exceeding $100 billion in the past two years. He also mentioned the recent currency swap agreement between the two countries, which has helped boost trade and investment.
New Developments in Saudi-China Relations
According to Hua, the cooperation between the two nations has grown significantly, particularly in the automotive, renewable energy, and tourism sectors.
In 2023, Saudi imports of Chinese cars reached $4.12 billion, driven by companies like Changan, Geely, MG, Chery, Great Wall, Hongqi, GAC, and BYD, which have opened branches in the kingdom.
Discussions are ongoing about building local manufacturing plants. China exported 4.91 million vehicles in 2023, making it the largest car exporter globally for the first time, including 1.203 million electric vehicles, a 77.6% increase from the previous year.
Hua noted that Saudi Vision 2030 aims for electric vehicles to account for at least 30% of all cars in Riyadh by 2030, and he expressed optimism about enhancing collaboration in automotive manufacturing.
Chinese companies are also increasingly involved in Saudi Arabia’s renewable energy sector. They are working on multiple solar projects, including the Al Shuaibah photovoltaic plant, the largest of its kind in the world, with a capacity of 2.6 gigawatts.
In July 2023, the Renewable Energy Localization Company (RELC), backed by the Saudi Public Investment Fund, signed agreements with three Chinese firms—Envision Technology Group, Jinko Solar, and TCL Zhonghuan—to establish joint ventures for high-efficiency solar cell production in Saudi Arabia.
These projects will focus on producing solar components, helping Saudi Arabia achieve its goal of sourcing 75% of renewable energy project components locally by 2030.
Hua also highlighted the increasing exchange of visits between citizens of both countries. In September 2023, China and Saudi Arabia signed a memorandum of understanding to facilitate group tourism, making the kingdom an official destination for Chinese tour groups.
Several Chinese travel agencies have begun offering packages to Saudi Arabia, and direct flights between the two countries are increasing. Saudi Airlines has expanded its routes, operating numerous weekly flights between Beijing, Shanghai, Shenzhen, Riyadh, and Jeddah.