Egypt’s foreign reserves dips

Egypt’s foreign reserves dropped by a further $3.07 billion in April as investors pulled cash from emerging markets. The country’s central bank says this has put a drain on funds that has pushed Egypt to seek help from the International Monetary Fund.

Reserves fell to $37.037 billion at the end of April from $40.108 billion at the end of March after having fallen by $5.4 billion in March.

Net foreign assets of the country’s banks plummeted by 162.12 billion Egyptian pounds or $10.33 billion in March, according to Central bank figures.

Egypt announced on April 26, that it is seeking IMF financial support in the form of a Rapid Financing Instrument (RFI) and its Stand-By Arrangement (SBA), both designed for countries facing urgent or potential balance of payments problems.

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The IMF’s executive board is scheduled to consider both requests on Monday. Egypt can borrow as much as $2.78 billion under the RFI and about $4 billion per year under the SBA, according to analysts and information on the IMF website.

Foreign investors in March, sold the equivalent of 149.3 billion Egyptian pounds ($9.5 billion) of Egyptian pound treasury bills, more than half of their holdings, data published on Thursday on the central bank website showed.

Foreign currency inflows stopped from tourism from mid-March, while remittances from workers outside of Egypt have also come under threat.

Tourism earned Egypt $13 billion and remittances $26.8 billion in 2019.

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