CAIRO: Egypt’s foreign exchange reserves are at a "strong level" and the economy is safe, the deputy central bank governor said after the reserves dropped to $24.01 billion in September, down $12 billion since the start of the year.
Egypt’s economy suffered from an exodus of tourists and foreign investors in the wake of the uprising that toppled former president Hosni Mubarak in February.
The political turmoil in Egypt has continued and on Tuesday Finance Minister Hazem El-Beblawi quit after less than three months in the post over the government’s handling of a protest on Sunday night.
"Egypt will not go bankrupt, and is not on the verge of bankruptcy," Hisham Ramez was quoted as saying to Al-Youm Al-Sabaa newspaper on Tuesday. "Egypt’s economy is safe … and Egypt’s foreign reserves are currently at a strong level."
"There won’t be a new sharp exit (of foreigners), nor a big retreat in Egypt’s foreign reserves in the coming period as the increase in other dollar resources makes up for losses in important foreign currency earners such as tourism and foreign direct investment," Ramez said.
Foreign currencies flowing into the country from two of its main revenue earners — remittances from Egyptians living abroad, and Suez Canal revenues — were sufficient to secure dollar resources for the country, he said.
Ramez confirmed the published remarks to Reuters.
Remittances from Egyptians living abroad reached a record-high of $12.6 billion at the end of July, Ramez said, adding that Suez Canal revenues reached $5 billion in the 2010-2011 fiscal year that ended in June.
On reserves, he said: "International economic standards categorize danger levels for international reserves as those that cover less than three months of imported goods, which is equal to $12.5 billion for Egypt, according to the prices of the basic and strategic commodities we import."
Egypt’s current external debt is $34.9 billion, representing 15.5 percent of gross domestic product, mostly in long-term debt, Ramez said.
"The most important thing in the coming period is to push the work and production wheel forward in the economic sectors that were most hurt from the events, namely attracting tourism and foreign direct investment once again," he added.