Egypt Forex Reserves Surge

Egypt’s foreign currency reserves climbed to a record in January just as the government prepares to raise as much as $5 billion from an international bond sale, Bloomberg reported. Reserves rose $1.2 billion, the most since July, to $38.2 billion, central bank data showed on Sunday. Foreign currency inflows to the central bank and other financial institutions increased by $1.5 billion to $5.6 billion, Central Bank Governor Tarek Amer said in a text message, without elaborating. Egypt repaid $290 million of a $350 million installment to Paris Club members in January, he said. The increase may aid Egypt’s efforts to tap global debt markets this month as policy makers seek to reduce borrowing costs. The data is the latest sign that Egypt has turned the page on a dollar shortage that squeezed the economy before authorities abandoned most currency restrictions and cut subsidies to secure a $12 billion loan accord with the International Monetary Fund. The surge in reserves since November 2016 was coupled with growth in Egypt’s external debt, as the country borrowed from international bond markets, friendly nations and international financial institutions.