Egypt’s net foreign assets decline by $3.25bn in November

Egypt’s net foreign assets (NFAs) tumbled by $3.25bn in November, the second decline in two months, as impending foreign liabilities put the currency under pressure, central bank data showed.

NFAs declined to the equivalent of $5.96bn from $9.21bn at the end of October, according to Reuters calculations based on the official central bank currency rates. The decline followed a $1.12bn drop in October.

Egypt has been using NFAs, which include foreign assets at both the central bank and commercial banks, to help prop up its currency since as long ago as September 2021. NFAs turned negative in February 2022 and only returned to positive territory in May last year.

Egypt’s currency came under particularly strong pressure ahead of large foreign liabilities in December. These included the maturing of Egyptian pound treasury bills held by foreign investors, nearly $1bn in International Monetary Fund (IMF) loan repayments and payments for natural gas imports, bankers, brokers and analysts said.

On December 5, the currency breached the 50-pound psychological barrier for the first time since March, when the IMF agreed to an $8bn financial support package and Egypt allowed its currency to fall.

Foreign assets rose at the central bank in November but dipped at commercial banks, while foreign liabilities slid at both the central bank and commercial banks.

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