CBE Financed Egypt’s Main Needs With US$ 35 Bln In Two Years

The Central Bank of Egypt (CBE) revealed that it financed the country’s main needs during the period from January 2011 till now with US$ 35 billion. It offered the government US$ 14 billion to purchase the required commodities and petroleum products, US$ 8 billion to repay foreign debts and US$ 13 billion to cover the losses which resulted after foreign investors divest of government debt instruments.

CBE added in a statement today that the bank used foreign cash reserves and other current resources in foreign currency, which accordingly led to a huge drop in foreign cash reserves as they fell from US$ 36 billion at the beginning of January 2011 to US$ 15 billion at the end of November 2012.

Therefore, the country shall conserve foreign reserves to meet the urgent and crucial needs and the main daily commodities, in addition to being ready for any future challenges.

CBE’s policy has been focused on finding solutions to face the economic problems since the beginning of 2011 as tourism income fell by 30% in a year due to the security lax and the sharp drop in direct foreign investments during the last two years as well as the foreigners’ divestment from government debt instruments because of the growing fears about the economy and the continuous downgrading of Egypt’s credit rating by five grades. These factors have made the balance of payment, which achieved surplus of US$ 1.3 billion at the end 2010, to post a deficit of about US$ 21.6 billion during the last year and half.