Egypt’s net foreign assets deficit contracts $586m in April

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Egypt’s net foreign assets (NFAs) deficit contracted by $586m in April, central bank data showed on Friday, after the International Monetary Fund (IMF) paid an $820m loan instalment to the country early in the month.

The end-April NFA deficit shrank to EGP174bn Egyptian pounds ($3.68bn) from GBP200bn pounds at end-March, according to the data, the third straight month of decline.

UAE-Egypt deal

Egypt signed an $8bn financial support package with the IMF on March 6 after sharply devaluing its currency, triggering a flood of portfolio investments and remittances from workers abroad. It received a first $820m tranche from the IMF in early April.

The remittances, portfolio investments and a $24bn real estate investment from the UAE shrank the NFA deficit by $17.8bn in March and $7.04bn in February.

Egypt received an initial $5bn payment from the UAE for the development rights to land on the Mediterranean coast in February, another $5bn in early March and a final $14bn in early May.

Commercial banks’ foreign assets climbed by $606m in April while their liabilities rose by $653m, according to Reuters calculations based on central bank data.

Central bank foreign assets rose by $1.02 billion while foreign liabilities declined by $393bn.

NFAs represent both central bank and commercial bank assets held by non-residents, minus their liabilities.

Before the IMF agreement, the central bank had been drawing on NFAs more than two and a half years to help support the country’s currency. In September 2021, NFAs stood at a positive $3.9bn.

Read: Egypt receives second payment of $14bn from UAE