Foreign reserves to continue rising despite turmoil, CBE
Hisham Ramez CBE governor - YOUM7 (Archive)

CAIRO: Egypt’s foreign reserves are expected to continue growing despite the continued political and economic turmoil, Governor of Central Bank of Egypt (CBE) Hisham Ramez said Wednesday.

Egypt’s foreign reserves edged up U.S. $202 million to register $17.307 billion as of the end of February, compared to $17.105 billion in January, CBE announced early this month.

“The reserves will continue going up,” Ramez told reporters during a meeting with Prime Minister Ibrahim Mahlab at the Cabinet Headquarters, Youm7 reported Wednesday.

During the meeting, Ramez and Mahlab discussed the issue of soaring prices witnessed recently. Ramez pointed to the need to provide food commodities at reasonable prices, and both officials agreed on the necessity of promoting the role of consumer complexes.

Egypt’s foreign reserves had dramatically declined in the wake of the political and economical turmoil following the January 25 Revolution which toppled former President Hosni Mubarak. However, foreign reserves improved due to the U.S. $12 billion aid pledged to Egypt by the UAE, Saudi Arabia and Kuwait following the ouster of President Mohamed Morsi on July 3.

Early in December, CBE paid back a U.S. $500 million deposit from Qatar after the Gulf State requested to postpone the conversion of the funds to bonds as agreed earlier.

Doha had deposited U.S. $1 billion late 2012 in the CBE, and the money was scheduled to be paid back in two installments. The CBE has transferred U.S. $500 million to Qatar on Nov. 1 as a first installment.

The foreign reserves consist of the main international currencies: the U.S. dollar, the euro, the British pound, and the Japanese yen. The foreign reserve allows the government to purchase basic commodities such a wheat and petroleum products, and pay off premiums and interest on foreign debts.

The currency basket changes on the basis of currencies’ exchange rate and stability in the global markets, according to a plan prepared by CBE officials.

The UAE has deposited U.S. $2 billion in the Central Bank and U.S. $1 billion as a non-refundable grant. Saudi Arabia deposited U.S. $2 billion in the Central Bank, U.S. $1 billion in cash and U.S. $2 billion in petroleum aid, while Kuwait deposited U.S. $2 billion in the Central Bank, U.S. $1 billion in petroleum aid and U.S. $1 billion as a non-refundable grant.

Additional reporting by Ahmed Yaqoub.

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