Egypt’s foreign-currency reserves dropped by 11% in July and net international reserves reached $15.5b, after authorities repaid about b in debt.
This is the biggest drop in FX reserves that Egypt has faced in 16 years. Devaluation of the Egyptian pound looms on the horizon as official crackdown on FX black-market traders continues, Bloomberg reported.
The Central Bank of Egypt (CBE) announced it had repaid $1.02b for Qatar’s Holding of Egypt’s sovereign Eurobonds, $714.4m to Paris Club Creditors as well as the first installment of a Libyan deposit with the regulator.
To ease an acute dollar shortage, policy makers weakened the pound by about 13% in March. A similar move is expected, after the government receives part of the IMF funds and assistance from other donors.
But the gap between the official and black market rates continued to widen after the March devaluation. In an attempt to curb FX consumption and regulate exchange rates, the CBE has revoked the licenses of dozens of foreign exchange offices that it says were selling dollars at rates far wide of the official one, according to Reuters.