Kuwait has renewed a USD 4 bn deposit with the Central Bank of Egypt (CBE) as officials in Cairo continue to battle an FX crunch, Asharq Business reported, citing what it said were government officials. The deposit includes two USD 2 bn tranches that mature in April and September of next year.

Remember: Kuwait has had USD 4 bn deposited at the CBE since mid-2015 and has continuously rolled it over.

Kuwait pulling the plug would have sent us back to 2017: FX reserves have slowly risen in recent months after we shed some used USD 8 bn following Russia’s invasion of Ukraine; the CBE’s reserves currently stand at USD 35.1 bn. Reserves would have declined to the lowest level since April 2017 had Kuwait taken back its money. Saudi Arabia, the UAE, Qatar, Libya, and Kuwait have some USD 30 bn on deposit at the central bank, accounting for 85.5% of our reserves.

And more might be coming: Chatter in the local press last month claimed in unconfirmed reports that Saudi Arabia and the UAE could deposit another USD 5 bn at the CBE, although this could also refer to a rollover of maturing portions of existing deposits. Abu Dhabi Commercial Bank chief economist Monica Malik recently said she had noted a “change in sentiment” of Gulf countries following the outbreak of the war on Gaza away from their recent reluctance to provide financial support to the country.

Tags: