Egypt’s foreign reserves hit US$38.366 billion in August, an increase of $51 million from July, a Monday statement by the Central Bank of Egypt (CBE) announced.
Egypt imports a monthly average of five billion dollars worth of goods and products from abroad, with an annual total estimated at more than $55 billion. The current foreign exchange reserves therefore cover about eight months of commodity imports to Egypt.
This is higher than the global average of roughly three months worth of commodity imports to Egypt, which secures the nation’s basic and strategic commodity needs.
Egypt’s foreign currency reserves increased significantly after it adopted an economic reform program with the support of the International Monetary Fund (IMF) in 2016.
The main function of the CBE’s foreign currency reserve – made up of gold and various international currencies – is to provide commodities, repay installments and external debt, and cope with economic crises during exceptional circumstances.
The reserves also help when the main sources of foreign currency for Egypt (tourism, exports and investments) become impacted in times of unrest.
Other sources of hard currency, such as remittances from Egyptians abroad (which have reached record levels) and Suez Canal revenues, contribute to the reserves.