Foreign assets rose by $3.5 billion while the CBE’s foreign liabilities decreased by $3.9 billion
Egypt’s net foreign assets (NFA) deficit saw a significant decline in March, falling an unprecedented $17.8 billion to hit a total deficit of $4.224 billion, according to recent data by the Central Bank of Egypt (CBE).
This signals the 2nd consecutive month in which the NFA deficit has dropped. The CBE reported the NFA deficit as $21.94 billion at the end of February.
Foreign assets rose by $3.5 billion while the CBE’s foreign liabilities decreased by $3.9 billion.
The continued decline in the deficit was attributed to increased inflows of remittances and foreign portfolio investments, including the 2nd payment of the Ras El Hikma deal in early March.
Further accelerating Egypt’s FX recovery after dealing with a prolonged foreign currency shortage was the EGP’s devaluation, which triggered an increase in Egypt’s loan from the International Monetary Fund (as well as approval for the previously delayed tranches), as well as a surge of portfolio investments and remittances from workers abroad.
Another decline in the net foreign assets deficit is expected, with the current figures not including the $830 million received from the IMF’s delayed tranches.
The EGP currently stands at EGP 47.88 against the USD, up from March’s recorded EGP 47.26 and February’s EGP 30.94.
Between February and March, Egypt received $10 billion from the Ras El Hikma deal with UAE sovereign fund Abu Dhabi Holding Company (ADQ), as well as separate deposits into the CBE.
