Egypt’s foreign currency reserves fell in March to $13.4 billion as the country pushed ahead with talks for an International Monetary Fund loan.
The drop from $13.5 billion in February was the smallest monthly decline since December. Reserves are more than 60 percent lower than their end-2010 levels, before the uprising that ousted longtime leader Hosni Mubarak and ushered in turmoil that has deterred tourists and foreign investors.
Egypt’s effort to decrease imports of non-essential items may have helped to slow the decline, Mohamed Abu Basha, an economist at investment bank EFG-Hermes Holding SAE in Cairo, said by phone today. Still, “the idea that it’s difficult to boost reserves back to comfortable levels without the IMF shows the urgency to strike the deal,” he said.
Planning and International Cooperation Minister Ashraf El- Arabi has told Al Arabiya satellite channel that the country hopes to raise its reserves to about $16 billion by the end of June. El-Arabi separately said Egypt would reach a final agreement with the IMF on a $4.8 billion loan within the coming two weeks, state-run Middle East News Agency reported today.
Previous rounds of loan talks have been delayed amid political bickering and unrest in Egypt that have made it harder for the government to push through IMF-linked measures such as tax increases.
Central Bank Governor Hisham Ramez told reporters this week that Egypt’s priority was meeting the basic needs of its population and that his job was to monitor inflation and “preserve the reserves as much as possible.”
Allies including Qatar, Saudi Arabia and Turkey have given Egypt billions of dollars in financial support since the uprising. The central bank said late last month it didn’t receive any such deposits in February and March.
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