Foreign reserves take hit in November; politics, low tourism to blame

Foreign reserves take hit in November; politics, low tourism to blame

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Thu, 06/12/2012 - 17:17

Foreign cash reserves held by the Central Bank of Egypt dropped by US$448 million in November, falling from $15.483 billion at the end of October down to $15.035 billion.

The 2.8 percent drop was brought on by Egypt’s efforts to repay its foreign debts as well as government attempts to stockpile strategic goods and petroleum products, which increased state expenditures, say economists.

A significant decline in tourism in November as well difficulty attracting foreign investments also contributed to the decline, in spite of increased remittances from Egyptians abroad.

Mohsen Adel, the vice president of the Egyptian Association for Financing and Investment Studies, predicted that the reserve may rise again with support from the African Development Bank as well as anticipated deposits from Qatar and Turkey to the CBE.

The current political situation would also likely impact foreign exchange reserves, Adel warned, which would in turn affect the rates of direct foreign investment and hit exports and tourism, as well.

Edited translation from MENA