Egypt’s Banking Sector Records $5.95 Billion Net Foreign Asset Surplus in November 2024
In November 2024, Egypt’s banking sector recorded a net foreign asset surplus of $5.95 billion, a decrease from the previous month’s surplus of $9.2 billion. Total foreign assets have declined while foreign currency reserves and net international reserves increased. However, gold holdings and Special Drawing Rights both saw reductions, reflecting ongoing adjustments in the country’s foreign reserves structure.
The Central Bank of Egypt (CBE) has reported a notable net foreign asset (NFA) surplus of $5.95 billion (EGP 295.6 billion) for the banking sector in November 2024. This marks a decline from the $9.2 billion surplus (EGP 450.861 billion) recorded in October 2024. Nonetheless, this surplus symbolizes a positive trajectory, as NFA turned positive in May 2024, following a deficit of EGP 174.385 billion in April, indicating a significant recovery in the sector.
As reported by the CBE, total foreign assets in the banking system, which includes both the central bank and commercial banks, declined to EGP 3.325 trillion by the end of November, down from EGP 3.584 trillion in October. Concurrently, liabilities also decreased to EGP 3.029 trillion compared to EGP 3.133 trillion the previous month.
Additionally, the CBE has disclosed an increase in the value of foreign currencies within its reserves, rising to $36.436 billion in December 2024, up from $36.140 billion in November. This increase of $296 million, alongside a rise in net international reserves to $47.109 billion, reflects a $157 million growth from November’s total of $46.952 billion.
However, there has been a decrease in gold holdings, which dropped to $10.644 billion in December from $10.777 billion in November. Special Drawing Rights (SDRs) also declined, amounting to $31 million down from $37 million. Egypt’s foreign reserves comprise a mix of major international currencies, including the US dollar, euro, British pound, Japanese yen, and Chinese yuan, with a focus on exchange rate stability.
The purpose of maintaining foreign exchange reserves is multifaceted: they ensure the availability of essential goods, enable external debt repayment, and support the economy in crises, particularly when revenue streams from hard currency-generating sectors decrease.
In conclusion, Egypt’s banking sector has achieved a net foreign asset surplus, reflecting improvements since mid-2024 after experiencing significant deficits. While total foreign assets and liabilities have decreased, foreign currency reserves have shown positive growth. This underscores the importance of maintaining a stable currency portfolio to support the economy amid fluctuating global economic conditions.
Original Source: www.dailynewsegypt.com
