Egypt’s foreign reserves rise to $44.14 by the end of May

CAIRO – 4 June 2018: Egypt’s foreign reserves increased by $106 million by the end of May 2018 to reach $44.14 billion, compared to $44.03 billion by the end of April 2018, according to the Central Bank of Egypt (CBE).

The state’s foreign reserves started to rebound since the delivery of a $12 billion three-year International Monetary Fund loan program in 2016.

The IMF Executive Board approved in November 2016 a three-year Extended Fund Facility (EFT) loan to Egypt worth $12 billion to support its economic reform program.

In December 2017, Cairo received the third $2 billion tranche of its loan, bringing total disbursements to $6.08 billion.

The $2 billion fourth tranche will be received by Cairo after concluding the program’s third review in June.

The current average of foreign reserves covers about eight months of Egypt's commodity imports, which is higher than the global average of about three months of commodity imports.

Egypt spends an average of $5 billion monthly on imports with an annual total of more than $60 billion.

Foreign currencies in Egypt’s foreign reserves include the U.S. dollar, euro, Australian dollar, Japanese yen and Chinese yuan.

The main function of the foreign exchange reserve, including its gold and various international currencies, is to provide commodities, repay the installments on interest rates of external debt, and to cope with economic crises.

Egypt had embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.

The country has floated its currency in November 2016 before it clinched a $12 billion loan from the International Monetary Fund (IMF).