Foreign reserves drop $205 million in May: CBE
Central Bank of Egypt - YOUM7(Archive)

CAIRO: Egypt’s net foreign reserve fell $205 million to $17.284 billion by the end of May, down from $17.489 billion in April, Central Bank of Egypt (CBE) announced on its official website Thursday.

Egypt’s foreign reserves witnessed a sharp decline after former President Hosni Mubarak’s resignation in 2011 from $35.8 billion at the end of December in 2010 to $17.489 billion in April from $17.414 billion in March, according to CBE data.

Meanwhile, the reserve saw slight recovery after former President Mohamed Morsi’s ousting in 2013 due to the $12 billion aid pledged to Egypt form Saudi Arabia, Kuwait, and the United Arab Emirates.

Abdel Fatah al-Sisi’s landslide victory in the presidential election will pave the way for pending aid and grants, especially after resuming talks with the International Monetary Fund (IMF) in the coming period.

Arab leaders congratulated Sisi Tuesday after the announcement that he won the elections, including the leaders of Kuwait, UAE, Morocco, Jordan, and Yemen, according to Saudi state news agency (SPA).

Saudi King Abdullah bin Abdulaziz Al Saud called for a donor conference to help boost the Egyptian economy in a congratulatory cable to President Sisi, SPA published.

Head of the Egyptian Private Equity Association Hany Tawfik attributed the decline to CBE’s dollar auctions aiming to confront the currency black market.

Tawfik told The Cairo Post however that Sisi’s victory will help reinstate tourism and foreign direct investments, two key sources of hard currency that were hurt dramatically by political upheaval since 2011.

Tawfik also urged the upcoming government to inject cash aid into projects and investment to generate revenues and reduce the soaring unemployment rate rather than covering the budget deficit.

“Sisi’s economic aides should determine Egypt’s requirements and projects that will be proposed during the conference,” Tafik said, welcoming Saudi King’s call for a donor conference.

“Unemployment and energy crisis should be taken into account while deciding such projects,” he added.

The foreign reserve allows the government to purchase basic commodities, such as wheat and petroleum products, to pay off premiums and interest on foreign debts.

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