Banking experts said that the UAE and Kuwait’s extension of the deadline for deposits due soon to 2024 and 2026 contributes to supporting cash reserves at the Central Bank of Egypt, and comes in light of the major role played by Arab countries in supporting the Egyptian economy in light of global economic conditions.
Banking expert Ahmed Shawky, stated that the announcement for the renewal of the two deposits is an indication of the strength of confidence in the Egyptian economy.
The cash reserve is a last line of defense, he said, resorted to in times of crises.
Shawky pointed out that before coronavirus pandemic, Egypt’s foreign currency reserve amounted to about $45 billion. During the pandemic, it declined due to the pressures of basic needs to confront coronavirus, he said, but gradually rose again after that.
He added that Egypt has many resources to increase its cash reserves, including tourism and remittances from Egyptians abroad.
Another banking source said that the volume of GCC deposits in Egypt, according to the latest available estimates, amounts to about $28.2 billion, divided into short-term deposits amounting to $13 billion and medium and long-term deposits totaling at $14.9 billion.
Of these deposits, the UAE’s share is $10.7 billion, Saudi Arabia’s share is $10.3 billion, Kuwait’s share is four billion dollars, Qatar three billion dollars, and Libya is about $900 million.
The source explained that the continuation of these deposits helps stabilize Egyptian economic security, supports Egypt in its negotiations with the International Monetary Fund, and aids Egypt in gaining access to new markets to market its dollar bonds.
The continuation of these deposits improves the future outlook of the credit rating agencies towards the Egyptian economy and confirms the strength of the economic and historical relations between Egypt and the Gulf and Arab countries, the source added, and the strength of mutual momentum and support.
The report on the external situation of the Egyptian economy, issued by the Central Bank of Egypt on Thursday evening, revealed the extension of the term of an Emirati deposit worth one billion dollars for a period of three years ending in July 2026.
The report also revealed the extension of the term of a Kuwaiti deposit worth two billion dollars for a year ending in April 2024, indicating that the total Kuwaiti deposits with the Central Bank of Egypt amount to about four billion dollars.
Banking expert Mohamed Abdel-al said that this announcement is timely and represents support for the continued confidence of the UAE, Kuwait and all Gulf states in Egypt’s political and economic march.
This in turn sends reassuring messages to the world and to foreign, Arab and Egyptian investors that Egypt will not face any future dangers within the scope of its commitment to repay its foreign debts and that it is capable of overcoming any repayment problems, he explained.
Abdel-Aal pointed out that Egypt has foreign exchange reserves that have been growing over the past 14 months, exceeding $35 billion, and supported by stable Gulf deposits.
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