After steadily inching upward since September 2015, Egypt’s foreign currency reserves dropped by US$2 billion in July, closing the month at $15.54 billion.
July’s reserves figures were the lowest since March 2015, which was one month before Egypt’s allies in the Arabian Gulf deposited $6 billion at the Central Bank of Egypt.
The $2 billion decrease came as Egypt repaid outstanding loans and deposits, including its twice-annual repayment of $715 million to the Paris Club, according to a press release issued by the CBE.
As part of a long-term effort to return funds to Qatar following the deterioration of relations after the ouster of former President Mohammed Morsi, Egypt repaid $1.02 billion to the Gulf state.
Egypt also repaid $250 million to Libya, in what is the first tranche to repay Libya’s April 2013 $2 billion central bank deposit.
The Egyptian government repaid $207 million in debt owed by the Egyptian General Petroleum Company, as well as $55 million for unspecified “short-term general obligations,” according to the CBE.
Other funds were allocated to meet the government ministries’ needs and to finance import procedures for commodities like food, medicine and what the CBE has determined to be non-luxury needs.
The Egyptian government is currently negotiation with an International Monetary Fund delegation to secure $12 billion in loans as part of a larger 3-year, $21-billion financing deal. During a 2015 consultation, the IMF advised Egypt to “strengthen international reserves” to create a buffer against domestic and regional risks.