Egypt’s net foreign assets (NFAs) saw a significant drop of $1.12 billion in October, reversing gains from the previous month, central bank data reveals.
The NFAs, which represent the balance of foreign assets and liabilities held by the central bank and commercial banks, fell to $9.21 billion in October. This marks a steep decline from the $10.33 billion recorded at the end of September, according to Reuters calculations based on official currency rates.
The decline follows a $591 million increase in September, signaling continued volatility in Egypt’s financial positioning. Analysts note that such fluctuations reflect the nation’s ongoing challenges in stabilizing its currency amid economic pressures.
Egypt has relied on its NFAs to support its currency since September 2021. The assets fell into negative territory in February 2022 but managed to climb back above zero in May 2023. This marked a brief reprieve in an otherwise strained fiscal environment.
While the central bank recorded an increase in foreign assets in October, commercial banks saw a decline. At the same time, foreign liabilities rose for both the central bank and commercial banks, compounding the nation’s financial difficulties.
This latest decline underscores the fragile state of Egypt’s economic recovery and highlights the importance of stabilizing foreign investment and domestic fiscal policies.
