Egypt's foreign currency reserves jumped by $1 billion to $14.43 billion in April, helped by a large deposit from Libya that analysts said would not resolve a currency crisis. Since a popular uprising that ousted Hosni Mubarak in early 2011, Cairo has run through more than $20 billion in reserves, borrowed billions more from abroad and delayed payments to oil companies to support its pound.
The uprising chased away tourists and investors, two of Egypt's main sources of foreign exchange, leaving it stuck in negotiations for a $4.8 billion dollar loan from the International Monetary Fund. So far it has balked at the economic policy conditions attached to the loan. The country's reserves only rose by $1 billion last month despite the $2 billion deposit from Libya, said Mohamed Abu Basha of EFG Hermes.
Some $900 million was burnt in April, "partially reflecting the $600 million foreign exchange auction," he said. The central bank held an exceptional $600 million foreign currency auction on April 14 to cover strategic imports such as wheat, meat and cooking oil. Libya announced the $2 billion deposit at the Egyptian central bank last month in a show of support for its neighbour. Qatar last month promised to buy $3 billion in Egyptian treasury bonds but is asking for an interest rate of 5 percent, a price Egypt considers too high, an Egyptian official said last week.
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