Egypt forex reserves increase to $16.04bln

The Central Bank of Egypt (CBE) announced a $1.6bn increase in Egypt’s net foreign currency reserves to $16.04bn at the end of May, but analysts warn this is a “temporary phenomenon”.

Analysts stated that certain factors like imports, exports, production and tourism are not taken into consideration when analysing the rise, giving a misleading indication of an economic improvement.

This is the second consecutive increase after Egypt’s foreign currency reserves rose to $14.42bn in April after a low of $13.4bn in March.

Financial expert Magdy Tolba described the rise in the levels as “temporary”, adding that vital factors are not included in the net reserves.

“We can’t say that there’s a real economic increase by simply looking at the rise in the levels, as important factors like imports and exports are not included,” Tolba said.

In May, former planning and international cooperation minister Ashraf Al-Araby forecasted foreign reserves to increase to $19bn by the end of this year.

However financial expert Alaa Moustafa said any increase is “unlikely as long as political instability remains.”