The Egyptian banking sector’s net foreign assets (NFAs), encompassing the Central Bank of Egypt (CBE), witnessed a significant 17 percent increase in February, reaching $10.172 billion, according to data released by the CBE.
This marks the second consecutive month of surplus growth, building upon the $8.7 billion recorded at the end of January. This improvement is primarily fueled by the sustained strengthening of the CBE’s own surplus in foreign currencies. The central bank’s NFAs rose by 0.8 percent month-on-month to $12.1 billion in February, continuing a decade-long trend of accumulation.
This robust performance by the CBE has played a crucial role in bolstering the overall surplus across the entire Egyptian banking sector.
Furthermore, commercial banks operating within Egypt also demonstrated a notable improvement in their financial standing. Their net foreign assets deficit experienced a substantial 42 percent reduction in February, falling to approximately $1.92 billion from $3.3 billion in January. This significant decrease indicates a strengthening of their foreign currency positions.
The positive shift in the banking sector’s NFAs follows the implementation of the fourth wave of exchange rate liberalization in March 2024. This policy adjustment appears to have had a considerable impact, as total net foreign assets transitioned into a surplus of $14.29 billion in May 2024 – a landmark achievement marking the first surplus in over two years.
This represented a dramatic turnaround from a deficit of $29 billion recorded at the end of January 2024. The continued growth in NFAs underscores the ongoing positive impact of recent economic reforms on Egypt’s financial stability.
