Egypt’s net foreign reserves rise sightly with IMF financing on way

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Egypt’s net international reserves rose slightly for a second month in a row, as the North African country awaits an influx of foreign financing after striking an International Monetary Fund deal.

The figure reached $33.4 billion in October, up from $33.2 billion the month before, the central bank said on Thursday in a statement.

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The second climb since September follows five months of non-consecutive declines this year after Russia’s invasion of Ukraine sent Egypt’s import bills for food and fuel soaring and spurred inflation to its highest since late 2018. Foreign investors have pulled $22 billion from the local debt market since March.

Some relief is coming in the form of a $3 billion IMF loan announced on October 27, with at least $5 billion more to come from international partners. The deal came as Egypt sharply devalued its currency for the second time in 2022 and announced new flexibility in its exchange rate, signaling a shift from practices that kept the pound stable by using foreign reserves.

The central bank is targeting more than doubling its net foreign reserves to $80.5 billion by 2027-2028, Egypt-based Naeem Brokerage said this week in a note.

Read more: IMF and Egypt agree to finalize work to reach staff-level agreement ‘very soon’

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