Egyptian Banks Foreign Assets jump 48% to $15 Billion

The net foreign assets surplus of the Egyptian banking sector—including the Central Bank—jumped by 47.7% month-on-month in March, supported by commercial banks' foreign positions shifting into a surplus for the first time in eight months.

According to official data published on the Central Bank of Egypt's website, foreign assets exceeded $15 billion, compared to approximately $10.172 billion at the end of February. This increase was supported by the shift of net assets of commercial banks in Egypt to a surplus of approximately $2.53 billion at the end of March for the first time since August, compared to a deficit of approximately $1.92 billion in February.

The foreign positions of commercial banks alone turned negative beginning in August, following three months of improvement in total assets, due to pressure on demand for the dollar.

Following the fourth wave of exchange rate liberalization in March 2024, the total net foreign assets of Egyptian banks as a whole shifted to a surplus of approximately $14.29 billion in May. This followed a deficit increase of nearly $29 billion at the end of January 2024, prior to the reform measures taken by the Central Bank of Egypt in March and the inflows from the Ras El Hekma project.

Net foreign assets represent banks' deposits and savings in foreign currencies, which can be liquidated when the bank needs liquidity to meet its obligations.

For the 11th consecutive month, the Central Bank of Egypt's net foreign assets surplus rose by 3.3% month-on-month in March to approximately $12.5 billion, compared to approximately $12.1 billion in February, according to data published on the Central Bank's website.

The shift in net foreign assets of commercial banks in Egypt to a surplus was supported by the increased flow of foreign exchange resources from various sources and the decline in currency pressures.

The exchange rate was set at 50.71 Egyptian pounds per dollar in February and 50.63 pounds per dollar in March, according to exchange rate data on the Central Bank's website.