MACROView: Solid buffers and moderate depreciation: The CBE’s recipe to deal with COVID-19
Egypt/ International reserves May 2020 reading
NIR fall at a slower rate; non-official reserves receive a boost from the IMF rapid financing facility: Egypt’s net international reserves (NIR) took a USD1.03bn hit in May 2020 after the pandemic outbreak continued to dry up the country’s main sources of FX inflows, tourism, and remittances. Nonetheless, non-official reserves accumulated some additional inflows from IMF’s rapid financing instrument (RFI) loan and increased by USD1.8bn. Technically, this means that the country’s total reserves have risen by c.USD800mn. We note that Egypt has successfully tapped the international bond market by selling USD5bn Eurobonds by end of May 2020; however, it seems the May figures did not reflect those inflows, suggesting they should be a part of the June reading. In addition, Egypt will soon be receiving USD5.2bn from the IMF, as per a staff-level agreement announced at the end of last week. Also, the country is seeking another USD4bn from other multilateral institutions.
Mona Bedeir
Senior Economist
Tel.: +202 3300 5722