Egypt’s foreign reserves growth not driven by hot money

Speaking at a press conference following a weekly cabinet meeting, Madbouly asserted that genuine economic activities are driving this growth.

In 2022, Egypt faced a significant outflow of an estimated $20 billion in hot money, driven by the Russian-Ukrainian war. This outflow exacerbated the country's foreign currency shortage at the time and contributed to economic instability.

Madbouly pointed to a 22 percent rise in exports, increased tourism revenue, and higher remittances from Egyptians abroad as key factors.

According to the Central Bank of Egypt (CBE), the country's net international foreign reserves (NIRs) increased by $174 million in June, reaching $48.7 billion (the highest level in decades), up from $48.526 billion in May.

Remittances from Egyptians working abroad surged by 69.6 percent year-on-year from July 2024 to May 2025, reaching approximately $32.8 billion.

Madbouly noted that these factors have provided sustainable sources of foreign currency, even amid geopolitical challenges affecting the Suez Canal, Egypt's primary source of foreign currency.

He also pointed to the decline in inflation rates as a positive indicator of the government's economic strategy.

Furthermore, Madbouly explained that lower inflation rates support government and private sector efforts to reduce profit margins on essential goods, which ultimately benefits consumers. The country's inflation rate for July was 13.1 percent, down from 14.4 percent in June.

Moreover, the average inflation rate for the second quarter of 2025 was 15.3 percent, roughly half the 29.4 percent recorded during the same period last year.

This reduction, Madbouly said, demonstrates the success of economic policies aimed at controlling prices and enhancing financial stability.