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Egypt’s Net Foreign Assets Deficit Swells in October

Egypt’s deficit in net foreign assets widened by 10.5 billion Egyptian pounds ($340.36 million) in October to an all-time high of negative 839.2 billion pounds, caused mainly by an increase in central bank liabilities, according to central bank data.

It was the second month running that the deficit had widened after having narrowed in both July and August.

Net foreign assets (NFAs) represent both central bank and commercial bank assets held by non-residents minus their liabilities. A 29.7 billion pound increase in liabilities held by the central bank was partly balanced in October by a 12.4 billion pound rise in foreign assets at commercial banks.

The central bank has drawn on the country’s NFAs to help support Egypt’s currency over the past two years. In September 2021, NFAs stood at a positive 248 billion pounds.

Egypt devalued its currency by nearly half from March 2022 to March 2023, but since then has left it fixed at 30.85 to the dollar. On Thursday, the pound traded at around 48 on the black market.

Source: Zawya

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