Foreign reserves fall to US$16.3 billion in September

Egypt’s foreign reserves fell to US$16.335 billion at the end of September, down by more than US$1.76 billion from the $18.096 billion recorded in August, the Central Bank of Egypt reported on Wednesday.

This figure is the lowest reported since March 2015, and indicates that Egypt is struggling to keep enough foreign currency on hand to pay for three months of imports, a threshold considered to be a marker of fiscal health. Central Bank figures for the first three quarters of the 2014/15 Fiscal Year put Egypt’s average three-month import bill at US$15.47 billion. 

The continued fall in foreign reserves is likely to further stoke tensions about Egypt’s foreign exchange policy.

Egypt’s investment minister, along with economists from institutions like the International Monetary fund, has urged Egypt to allow the pound to devalue in order to protect the country’s foreign currency reserves.

The Central Bank has held the pound steady against the US dollar, allowing only two small devaluations in 2015.

On Saturday October 3, President Abdel-Fattah al Sisi weighed in on the debate, saying the country should reduce imports in order to ease the burden on the state’s foreign reserves.