Foreign reserves rise to US$20.08 bn in June

Egypt’s foreign reserves climbed to US$20.08 billion in June, the Central Bank reports. At the end of May, reserves were reported at $19.56 billion.

June marks the second month in 2015 in which reserves have risen above the $20 billion mark. In April, reserves hit $20.53 billion, the highest level since September 2011.

The increase in reserves in April came after Saudi Arabia, Kuwait and the United Arab Emirates deposited a total of $6 billion at the Central Bank. According to statements at the time by Central Bank Governor Hesham Ramez, the deposits will have to be returned with 2.5 percent interest in three to five years.

June’s bump in reserves comes after Egypt issued $1.5 billion worth of US-dollar denominated 10-year bonds. The Central Bank has also maintained strict controls on the flow of dollars in and out of the banking sector.

On the eve of the 2011 revolution, reserves stood at $36 billion.

Egypt requires a steady supply of hard currency to finance food, fuel and other commodity imports. Traditionally, it relied on tourism, foreign direct investment, worker remittances and Suez Canal tolls to keep foreign currency flowing into the country. With tourism and foreign direct investment still down, loans and donations from the government’s allies in the Gulf have played an increasingly important role in keeping reserves above a critical level.