Egypt foreign reserves down in September

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Photo – BBCNews

Egypt’s foreign reserves recorded a fall of $84 million in September but held above the $15 billion seen as necessary to shore up the pound for a third straight month after foreign donors began fulfilling promises of aid.

With the reserves still close to danger level, economists cautioned against reading too much into the latest number until it was clear whether it included disbursements of foreign aid. But one said Egypt had adequate reserves till the year-end.

Government efforts to secure a $4.8 billion International Monetary Fund (IMF) loan to support the struggling economy have cut Egypt’s borrowing costs in recent weeks although a planned visit to Cairo by an IMF team has been delayed until late October.

The Central Bank of Egypt (CBE) said on its website that net international reserves fell to $15.04 billion at the end of September from $15.13 billion at the end of August.

Reserves have plunged by more than half since a popular uprising in January 2011 scared away tourists and investors, two of Egypt’s main sources of foreign currency.

Since February, they have hovered near $15 billion, a level seen as a minimum to avoid a crisis of confidence in the local currency the Egyptian pound.

They would have fallen further without aid from countries such as Saudi Arabia and Qatar, disbursed since Egypt’s new president took office in late June.

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