Egypt’s Gold Reserves Drop by $2.31 Billion in March

The gold component of Egypt’s foreign exchange reserves witnessed a significant decline during March, marking its first drop in nearly eight months. This occurred alongside an increase in foreign currency holdings, which helped maintain the overall stability of the total international reserves.

The Gold Component: Price vs. Quantity

Data from the Central Bank of Egypt (CBE) revealed that gold reserves fell by approximately $2.31 billion in March—a monthly decline of 10.7%—bringing the total value to about $19.19 billion. This ended a multi-month rally where gold had been a primary driver of reserve growth.

However, the report clarifies that this dip was driven by global market trends rather than a sell-off:

Global Price Impact: International gold prices dropped by roughly 11% in March, with the price per ounce settling around $4,676. This closely aligns with the percentage decrease in the value of Egypt's gold reserves.

Actual Holdings Increase: Contrary to the decline in dollar value, Egypt actually increased its physical gold holdings by approximately 2,700 ounces during March. This confirms the Central Bank's ongoing strategy to bolster gold as a key strategic reserve component.

Foreign Currency and IMF Inflows

While the value of gold retreated, liquid foreign currency reserves rose for the first time in two months, jumping by approximately $2.4 billion to reach $33.1 billion.

This surge is largely attributed to:

IMF Funding: Egypt received approximately $2.3 billion from the International Monetary Fund (IMF) following the approval of the fifth and sixth reviews of its financing program.

Overall Reserve Stability

The growth in foreign currency balances effectively offset the decline in gold valuation. As a result, Egypt’s total foreign reserves remained stable, edging up by $85 million to reach $52.83 billion by the end of March.

 The structure of reserve growth shifted in March. While gold had been the primary engine for recent increases, foreign currency inflows and external financing have now taken the lead in supporting the nation's financial cushion.