FX reserves blow past pre-pandemic levels: Net foreign reserves increased by a little over USD 5 bn in May, up from USD 41.1 bn in April, and hitting a record USD 46.1 bn, according to central bank figures.

A fresh high: May’s figures top their pre-Covid peak of USD 45.5 bn after the final tranche of the Ras el Hekma funds landed in state coffers. That’s their highest level on record, according to data compiled by Bloomberg.

ICYMI: Abu Dhabi wealth fund ADQ delivered the second tranche of the landmark USD 35 bn Ras El Hekma agreement in mid-May. The USD 20 bn tranche consisted of USD 14 bn in fresh inflows and USD 6 bn in the form of a previous UAE deposit at the central bank.

And they’re expected to continue their ascension in the coming months: Credit rating agency Fitch Ratings expects Egypt’s foreign currency reserves to reach USD 49.7 bn in the current fiscal year and USD 53.3 bn in the next, the agency said last month.

More to come: The USD 15 bn first tranche of the Ras El Hekma agreement gave the central bank the buffer it needed to float the EGP and hike rates by 600 bps, a move that helped attract FX liquidity back to the official banking system and paved the way for more foreign funding. Egypt has over the past few months lined up some USD 57 bn worth of foreign support — including the IMF’s expanded USD 8 bn package, the EUR’s 7.4 bn package, and USD 6 bn in financing from the World Bank.

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