Foreign reserves reached their highest level since April last month, rising almostUSD 800 mn in December to top USD 40 bn, according to central bank figures released yesterday. This was the largest monthly increase in 2020.

Foreign reserves came under serious pressure amid the sell-off in emerging markets earlier this year: Egypt’s FX stockpile fell by around USD 10 bn between March and May when the central bank stepped in to cover portfolio outflows, meet debt repayments, and pay for commodity imports during the global selloff of emerging market assets. Reserves have now clawed back almost half of 2020’s losses, and remain more than USD 5 bn short of the USD 45.5 bn peak in February.

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