Global headwinds accumulated, but buffers were tuned to smooth the pressures. Egypt’s official net international reserves (NIR) stabilized at USD40.99bn, having inched up by USD50mn in January 2022. The marginal uptick was attributed to a USD85mn increase in the stock of foreign currency, standing at USD34.14bn vs. USD34.06bn at end of December 2021. Meanwhile, both stocks of gold and SDRs fell by a total of USD39mn. We believe January’s slight increase in reserves is quite orchestrated as it comes amid higher pressures on FX inflows driven by growing fears of global tightening conditions and a higher commodity price outlook. The fall in the stock of non-official reserves in January also supports this view, having fallen by USD2.54bn to stand at USD9.18bn – the lowest level in four months. We believe the drop was due to repayment of a USD2.5bn Eurobond due in January 2022. Overall reserves ended January at USD50.17bn (+10% y/y).
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Mona Bedeir
Chief Economist
T +202 3300 5722