• Net Foreign Assets Deficit Reduction: In November, Egypt witnessed a notable decrease of 5.26 billion Egyptian pounds ($170.5 million) in its net foreign assets deficit, as reported by Egypt’s central bank data.
• Driving Forces Behind the Shift: The reduction in the deficit can be attributed to the rising assets within commercial banks, coupled with a simultaneous decline in central bank liabilities.
• Persistent Challenges in Deficit Ranking: Despite the positive shift, it’s crucial to highlight that the current deficit still holds the distinction of being Egypt’s third-highest on record, following previous peaks in June and October.
Egypt’s net foreign assets deficit saw a reduction of 5.26 billion Egyptian pounds ($170.5 million) in November, settling at 834.0 billion pounds, reveals data from Egypt’s central bank, according to media reports.
This shift was propelled by the ascent of assets in commercial banks and a concurrent dip in central bank liabilities, Reuters reported.
While this marks an improvement, it’s essential to note that the current deficit retains the distinction of being Egypt’s third-highest on record, with preceding peaks recorded in June and October.
Net foreign assets (NFAs) encompass both central bank and commercial bank assets held by non-residents, subtracted from their liabilities.
The central bank’s strategic utilization of the country’s NFAs over the past two years has been instrumental in bolstering Egypt’s currency.
In September 2021, NFAs were in positive terrain, reaching 248 billion pounds.
Against a nearly 50% devaluation of the currency from March 2022 to March 2023, Egypt has steadfastly maintained a fixed exchange rate of 30.85 to the dollar.
As of Thursday, the pound was observed trading at approximately 51 on the black market, indicative of ongoing dynamics in the foreign exchange landscape.
If you see something out of place or would like to contribute to this story, check out our Ethics and Policy section.