Foreign reserves dip after Qatar repayment

The Cairo Post:
CAIRO: Egypt’s foreign reserves declined by $ 1.27 million at the end of November to $ 15.9 billion from $16.9 billion in October, the Central Bank of Egypt announced Sunday on its official website.

Reserves recorded a $38 million increase in October, and November’s decline follows the repayment of a $250 million deposit to Qatar Nov. 28, upon an official request from Doha.

Some experts had predicted the repayment would not affect the reserves, due to a $1 billion grant from Kuwait Nov. 6.

The foreign reserve allows the government to purchase basic commodities, such as wheat and petroleum products, and to pay off premiums and interest on foreign debts.

Since the exit of former President Hosni Mubarak in Feb. 2011, Egypt’s foreign reserves sharply declined from $35.8 billion at the end of December 2010 to only $17.48 billion in April 2014. Gulf States’aid of $12 billion that was given to Egypt after the ouster of former Islamist President Mohamed Morsi helped the reserves to see a slight increase

“As long as Egypt still repays foreign deposits and builds development projects, the foreign reserve will be affected,” economic expert Abdel Rahman Taha told The Cairo Post Monday, adding that this decline would stop if Egyptian expatriates started to send their remittances home and if the tourism sector recovered.

Within coming three years, the foreign reserves are expected to witness a jump due to holding the Economic Conference that was scheduled in March, the project of Suez Canal Development project, and the project of global hub for the storage and distribution of commodities and grain in the port of Damietta, Taha continued.

“Egypt imports 95 percent of its needs from China; so there should be an alternative solution as Egypt should cooperate and deal in yuan, the value of which is very close to the Egyptian pound,” he said.

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