Net foreign assets fall in April for the first time in four months

Net foreign assets in Egypt’s banking sector fell for the first time in four months in April, coming in at USD 13.5 bn, down 10.0% m-o-m from USD 15.0 bn recorded for March, according to data (pdf) from the Central Bank of Egypt. The decline comes despite a continued uptick in foreign assets, as rising liabilities across the sector dragged down the overall balance.

Commercial banks maintained a surplus — albeit narrower — for the second month running, with their net foreign assets coming in at USD 1.6 bn in April, down from USD 2.5 bn the month prior. Foreign assets rose to USD 31.3 bn, up from USD 30.6 bn in March, but liabilities also jumped to USD 29.7 bn, up from USD 28.1 bn.

The central bank’s net foreign assets surplus also narrowed, coming in at USD 11.9 bn, down from USD 12.5 bn a month earlier. Foreign assets inched up to USD 46.7 bn compared to March’s 46.4 bn, while liabilities rose to USD 34.8 bn — a USD 1.0 bn increase from March.

The contraction in net foreign assets surplus follows March’s record high, which surpassed the previous peak of USD 14.3 bn recorded in May 2024 — courtesy of the second and final tranche of the USD 35 bn Ras El Hekma agreement, which brought in some USD 14 bn in fresh inflows. Before that, Egypt had been in a prolonged net foreign asset deficit since February 2022, when the outbreak of the war in Ukraine triggered capital outflows of around USD 20 bn.