In July, the deficit narrowed by $805mln
CAIRO – Egypt’s net foreign assets deficit narrowed by 11.1 billion Egyptian pounds ($360 million) in August to a negative 801.3 billion pounds, its second improvement in two months, according to central bank data.
In July, the deficit narrowed by 24.9 billion Egyptian pounds. Almost all of the improvement in both July and August was caused by an increase in net foreign assets (NFAs) with commercial banks.
A drawdown on NFAs, which represent both central bank and commercial bank assets owed by non-residents minus their liabilities, has helped the central bank support Egypt’s currency over the past two years.
In September 2021, NFAs stood at a positive 248 billion pounds.
Following a squeeze on its finances, Egypt devalued its currency in March 2022 and several times since after fixing it to the dollar for a year and a half. The Egyptian pound has lost half its value against the dollar over the last 18 months.
The IMF said in December that Egypt had been financing its current account deficit by drawing down NFAs.