Net foreign liabilities widened in June, says CBE: Egypt’s net foreign liabilities hit a new high in June amid th e country’s continuing FX shortage, central bank figures published this week show. The deficit in net foreign assets widened to negative USD 27.1 bn during the month from negative USD 24.4 bn in May, according to our math .

The decline in net foreign assets was driven by widening net liabilities in the banking system, which increased to USD 17.1 bn from USD 14.5 bn in May. Net foreign liabilities in the central bank remained almost unchanged.

WATCH THIS SPACE- Under the ongoing IMF program, the Central Bank of Egypt is required to consult with the Fund should the banks’ NFA deficit widen by USD 2 bn in a three-month period. NFAs declined b y almost USD 1.8 bn in the three months to June, according to our math .

State banks are trying to attract new FX inflows: Banque Misr and the National Bank of Egypt last week launched two new USD-denominated certificates of deposit, offering high interest rates and favorable payout terms in return for FX deposits.

Remember: Egypt has been suffering a prolonged FX crunch triggered by the global shock caused by Russia’s war in Ukraine and rising interest rates. The EGP has lost almost half of its value against the greenback since March 2022, fuelling a resurgent parallel currency market where the EGP is currently trading at a around an 18 % discount to the official rate, placing further pressure on FX liquidity in the banking system.

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