Net foreign assets in Egypt’s banking sector rose for a second month running, logging USD 10.2 bn in February, up 17.2% from January’s USD 8.7 bn surplus, according to data (pdf) from the Central Bank of Egypt. The two-month rebound follows a sharp three-month downturn during which net foreign assets fell to just USD 5.2 bn in December from USD 10.3 bn in September — a period marked by seasonal FX pressures and heightened USD demand.

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A narrower deficit at commercial banks helped lift the sector’s external position, with its net foreign asset deficit shrinking to USD 1.9 bn in February from USD 3.3 bn a month earlier. The improvement came as foreign assets rose to USD 26.2 bn, while liabilities dipped to USD 28.1 bn.

The central bank continued to book modest gains, recording a net foreign asset surplus of USD 12.1 bn in February, up slightly from USD 12.0 bn in January. Foreign assets rose to USD 46.0 bn from USD 45.7 bn, while foreign liabilities eased to just under USD 33.9 bn from USD 33.8 bn a month earlier.

Still, the banking system’s external position remains well below last year’s peak. Egypt’s net foreign asset surplus is down 28.7% from its May 2024 high of USD 14.3 bn. Commercial banks have remained in deficit for seven consecutive months.

REMEMBER- The May peak marked the first time that net foreign assets recorded a surplus in over two years, which followed the receipt of the second and final tranche of the USD 35 bn Ras El Hekma agreement bringing in some USD 14 bn of fresh inflows. Prior to that, the country had been in a sustained deficit since February 2022, when Russia’s invasion of Ukraine triggered capital outflows of around USD 20 bn.

The global press also took note of the news: Reuters.

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