Net foreign assets in the Egyptian banking system fell to USD 9.2 bn by the end of October, down from USD 10.31 bn in September, according to EnterpriseAM calculations based on Central Bank of Egypt figures. This marks the lowest surplus in net foreign assets in the country’s banking system since its shift from deficit in May for the first time in more than two years.

Driving the decline were commercial banks: The net foreign asset deficit in commercial banks deepened in October to USD 1.4 bn, up from a deficit of USD 132 mn in September. Assets in commercial banks fell by USD 362.8 mn to USD 27.7 bn, while liabilities rose by around USD 920.6 mn to USD 29.2 bn by the end of October.

The central bank’s foreign assets partially offset the overall decline: The CBE saw its net foreign assets increase by 1.9% to USD 10.6 bn in October to help offset the overall decline in net foreign assets in the banking system during the month. The CBE’s assets rose by USD 800.6 mn to USD 45.4 bn, while liabilities rose by around USD 493.5 mn to USD 34.8 bn by the end of October.

Remember: Net foreign asset deficit in the Egyptian banking system reached its all-time high back in January, recording USD 29.0 bn, before gradually dropping in the months that followed the Ras El Hekma agreement, the float of the EGP, and later foreign portfolio inflows.

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