CBE: Foreign Reserves Sufficient to Meet Import Needs for 7 Months

Deputy Governor of the Central Bank of Egypt (CBE) Rami Aboul Naga said that Egypt's foreign reserves are sufficient to meet import needs for a period of more than 7 months, which is higher than international averages.

Aboul-Naga added in statements to Al-Arabiya channel that Egypt succeeded in building a strong historical reserve of more than $ 45 billion, which exceeds the needs of the country as it was aiming to secure the situation, improve the credit rating of Egypt, and secure all basic commodity needs during any crises.

The deputy governor stressed that Egypt has a great ability to enhance foreign reserves through cooperation with the International Monetary Fund (IMF), multilateral institutions and the international bond market.

He explained that yesterday, Egypt obtained the payment of the financing package from the IMF, which amounts to $ 2.77 billion, and is currently negotiating with the Fund on the value of the credit standby agreement, stressing that Egypt's economy is large and persified, and depends in part on external financing.

Egypt Foreign Reserves Fell to $37 Billion Due to Pandemic

The Central Bank of Egypt (CBE) announced, earlier this month, the decline of its Foreign exchange reserves to $37 billion by the end of April, in light of the continued repercussions of the spread of the coronavirus (COVID-19).

For the second month in a row, foreign direct investments (FDI) exit many emerging markets, including Egypt. The Central Bank stated the decline in foreign reserves to reach at the end of April about $37,037 billion, compared to $40,108 billion at the end of March 2020.

On the meeting of the Monetary Policy Committee of the CBE, Aboul Naga explained that the committee meets every 6 weeks to consider all developments of monetary policy, and takes into account all the analysis carried out by the central bank to determine the general direction of monetary policy.

He pointed out that Egypt moved proactively on March 16 by cutting interest rates by 300 basis points to contain the expected urgent repercussions of the corona pandemic crisis.

Asked about an adjustment to the levels of interest rates in Egypt, Aboul Naga said that the decision remains in the hands of the Committee that will be held tomorrow.

"The central bank has the ability to curb inflation, which is one of the main goals to reach an inflation rate of 9% by the last quarter of this year, with a margin of (±) 3%.

He pointed out that the slight increases in general or core inflation are not worrisome for the CBE, and they came in line with the bank's expectations as the crisis was expected to reflect a rise in food commodities.