MACROView: Buffers Grew Despite Signs of Unwelcome Tightening of Financial Conditions
Headline NIR spurred in tandem with significant growth in non-official reserves: Egypt’s NIR grew by USD100mn to USD40.2bn by the end of February 2021. At the same time, non-official reserves grew by USD3bn to stand at USD7.8bn, the highest level since the end of March 2020. Thus, overall reserves (NIR + non-official reserves) reached USD48.9bn, covering nine months of merchandise imports. The overall level of reserves is now closer to restore most of its losses triggered by the massive pandemic-driven capital outflows by end of March 2020. However, we note that changes in the non-official account are usually temporary; indeed, the significant growth in February was mainly driven by the issuance of USD3.75bn Eurobond on 8 February, which will soon be allocated for fiscal financing.
Mona Bedeir
Senior Economist
T +202 3300 5722