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Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

CBE Announces Drop in Foreign Reserves to $36 Billion


Mon 08 Jun 2020 | 03:15 AM
Taarek Refaat

The Central Bank of Egypt (CBE) said on Sunday that the volume of foreign exchange reserve balances dropped to about $36 billion at the end of May 2020 compared to about $37 billion at the end of April, a decrease of about $1 billion.

Egypt imports an equivalent of an average of $5 billion a month of goods and products from abroad, with an annual total estimated at more than $55 billion, and therefore the current average foreign exchange reserves cover about 8 months of imports, which is higher than the global average of about 3 months of commodity imports, in a way that secures Egypt's basic and strategic needs.

Foreign currencies in Egypt's foreign reserves consist of a basket of the main international currencies, which are the US dollar, the single European currency "euro", the pound sterling, the Japanese yen, and the Chinese yuan, distributed on the basis of the exchange rates of these currencies and their stability in international markets.

CBE's foreign reserves witnessed a drop of $8 Bln recently

The primary function of the foreign exchange reserve at the CBE, with its components of gold and various international currencies, is to provide basic commodities and pay the premiums and benefits of foreign debt, as well as confronting economic crises in exceptional circumstances.

Meantime, currency-generating sectors, such as exports, tourism and investments, were hit hard by the COVID-19 pandemic, however, other sources, such as remittances from Egyptians abroad that have reached a record level, and the stability of the Suez Canal revenues, contribute to supporting the reserve in recent months.

It is note worthy that Egypt is expected to receive a $ 5.2 billion loan from the International Monetary Fund (IMF) to support the country maintain macroeconomic stability and push forward major structural reforms amid the shock of the COVID-19.