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The Central Bank of Egypt (CBE) announced that net foreign reserves in Egypt rose to $46.126 billion in May 2024, compared to $41.057 billion in April 2024, an increase of $5.068 billion. Earlier in April, Fitch Ratings expected Egypt’s foreign currency reserves to reach $49.7 billion during FY2023/2024, and $53.3 billion in FY2024/2025. Fitch Ratings has also upgraded Egypt's long-term foreign-currency (LTFC) Issuer Default Rating (IDR) outlook from Stable to Positive, while maintaining the IDR at 'B-'. This shift highlights Egypt's bolstered economic resilience and decreased external vulnerabilities. The rating agency cited several factors driving this positive outlook. Firstly, Egypt has significantly mitigated near-term external financing risks through initiatives such as the Ras El Hekma deal with the United Arab Emirates (UAE), the implementation of a flexible exchange rate, and stricter monetary policies. These measures have facilitated additional financing from international financial institutions (IFI) and stimulated renewed inflows of non-resident capital into the domestic debt market. Recently, the cabinet revealed that Egypt officially received the 2nd tranche of the Ras El Hekma deal from the UAE. Prime Minister, Mostafa Madbouly, revealed that the UAE transferred $14 billion as part of the agreement. According to the cabinet statement, Egypt is working with the UAE to waive an Emirati deposit of $6 billion in the CBE and convert it to Egyptian pounds (EGP 280 billion). In February, the CBE and UAE were reported to be coordinating to convert $11 billion worth of UAE deposits into EGP. Business Today
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