Egypt Central Bank Governor Says Foreign Reserves to Continue to Rise

Egypt’s Central Bank governor Hisham Ramez said on Wednesday he expects the country’s foreign currency reserves to continue growing despite continued political and economic turmoil.

The reserves, which plummeted after a 2011 uprising that ousted President Hosni Mubarak, have picked up since last July when Gulf Arab states extended billions of dollars to Egypt after the army took over from elected Islamist President Mohamed Morsi.

“The reserves will continue going up,” Ramez told reporters without providing details.

Reserves rose to $17.307 billion in February from $17.105 billion in January but are still nearly half the level seen before Mubarak’s departure as political turmoil has hit tourism and foreign investment and the central bank has had to use up reserves to defend the Egyptian pound.

A repatriation scheme opened in March last year aimed at restoring confidence in Egypt’s economy. It guarantees foreign investors in Egypt’s stock and government bond markets access to dollars despite severe shortages of foreign currency.

The central bank said last week it covered 50 percent of a backlog of dollars owed to foreign investors seeking to repatriate funds from the country. Ramez said on Wednesday the other 50 percent will be transferred next month.

Foreign reserves fell to a critical low of $13.5 billion last year, down from $36 billion before the revolt that toppled Mubarak.

The central bank has been rationing dollars through routine auctions to commercial banks to slow a slide in the local currency.

Egypt is pushing through with a road map for political transition that calls for presidential and parliamentary elections this year following the army’s ouster of Morsi after protests against his rule.

Source: Reuters