Egypt’s net foreign asset deficit continues to narrow in April for third consecutive month

Egypt’s net foreign asset deficit continued to narrow in April, as the country’s banking system continued to feel the effects of the float of the EGP and subsequent FX inflows following the Ras El Hekma agreement. Net foreign asset deficit fell to USD 3.7 bn in the Egyptian banking system, down from USD 4.2 bn in March, according to Enterprise calculations based on Central Bank of Egypt figures.

Data point: The country’s external position has improved for three consecutive months with the net foreign asset deficit narrowing 87% since reaching an all-time high of USD 29.0 bn in January.

You can thank the central bank’s net foreign asset position: The Central Bank of Egypt’s net foreign asset deficit nearly halved to USD 763 mn, down from USD 1.4 bn in the previous month. Foreign assets rose over USD 2 bn, while foreign liabilities at the CBE rose nearly USD 1.4 bn.

But commercial banks saw their net foreign asset deficit widen — albeit very slightly: The net foreign assets deficit in commercial banks recorded just under USD 2.9 bn, up from USD 2.8 bn in March. Commercial banks saw their foreign assets rise USD 1.3 bn, while liabilities rose USD 1.4 bn during the same period.