Egypt net foreign reserves drop by $1 bln in May
Egypt's plunging foreign reserves declined by a further $1
billion in May, the central bank said on Sunday, as the coronavirus crisis
continues to pressure the economy.
Reserves at the end of May were $36 billion, down from $37
billion at the end of April, having already fallen by $3.07 billion in April
and $5.4 billion in March as investors unnerved by the coronavirus pulled cash
from emerging markets.
The May decline looks small compared with the previous
months, but the extent of outflows could be higher if any proceeds from May's
$5 billion eurobond sale and $2.78 billion from the International Monetary Fund
(IMF) was used to bolster reserves.
"For now we can assume capital flight," said
Renaissance Capital analyst Ahmed Hafez, adding that banks may have tapped
central bank funds to cover some of their net foreign liabilities.
"Overall, higher than expected, but under
control," he said of the latest decline.
The central bank could not be immediately reached for
comment.
The COVID-19 crisis has squeezed some of the country's main
sources of foreign currency, especially tourism and remittances from workers
abroad.
"With close to $8 billion of external funding raised
during the month, the net international reserves drop comes as a surprise to
us," said Allen Sandeep of Naeem Brokerage.
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