HC at­tributes $2bn de­cline in for­eign re­serves mainly to debt re­pay­ment

The Daily News Egypt - - Business -

Egypt’s net in­ter­na­tional re­serves de­clined to $42.551bn in De­cem­ber from $44.513bn in No­vem­ber 2018, ac­cord­ing to the Cen­tral Bank of Egypt (CBE) data.

HC Se­cu­ri­ties and In­vest­ment (HC) said on Tues­day that the $0.9bn for­eign port­fo­lio out­flow cor­re­sponds to a net for­eign li­a­bil­ity po­si­tion of do­mes­tic banks widen­ing to $7.3bn in No­vem­ber from $5.5bn in Oc­to­ber 2018.

Monette Doss, eq­uity an­a­lyst in the Macro and Bank­ing Sec­tor at HC, said that debt re­pay­ment sched­uled for the se­cond half (H2) of 2018 amounted to $7.2bn of which $4.3bn are de­posit re­pay­ments to Arab coun­tries.

HC ac­cord­ingly at­trib­uted the $2bn de­cline in for­eign re­serves mainly to debt re­pay­ment as­sum­ing $1bn of debt rollover. It ex­pected the gov­ern­ment to re­ceive the fifth $2bn in­stall­ment of the $12bn Ex­tended Fund Fa­cil­ity in Jan­uary, which could off­set the de­cline in re­serves. The debt re­pay­ment sched­uled for H1 of 2019 amounts to $5.1bn of which $2.6bn are de­posit re­pay­ments to Arab coun­tries.

Ac­cord­ing to the CBE, the de­cline was mainly at­trib­uted to redemption of trea­sury bills held by for­eign in­vestors whose hold­ings of Egyp­tian T-bills dropped to $10.8bn as of the end of No­vem­ber from $21.4bn in March 2018, for­eign debt ser­vic­ing, and re­pay­ing for­eign li­a­bil­i­ties of some min­istries and gov­ern­ment en­ti­ties.

Monette Doss, Eq­uity An­a­lyst, Bank­ing & Macro at HC Re­search Dept

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