At the end of 2015, international foreign reserves at the Central Bank of Egypt (CBE) increased slightly by $23m in December.
CBE issued a statement on its website on Monday evening stating that foreign exchange reserves have increased to $16.445bn at the end of December from the $16.422bn in November 2015.
Though slight, the increase raised many questions about the source of money since the bank had not obtained any hard currency but has been injecting dollars into the market to cover imports.
Daily News Egypt spoke to the head of treasury and capital markets at a foreign bank operating in Egypt, Tamer Youssef, who said that the CBE receives a fixed amount of hard currency on a monthly basis from the Suez Canal revenues, about $400m. The CBE uses the money to cover the demand for dollars through its tri-weekly FX Auctions, $40m each.
The dollars the CBE injected in December to cover part of the temporary credit allowances in foreign international reserves at banks have returned as one-year deposits. “Hence, it will not affect the CBE’s reserves,” he said.
The state did not have to repay any foreign debts in December, which has helped maintain reserves.
The CBE receives dollars from other sources, such as Egyptian remittances. “Some of these remittances enter the banking system,” Youssef said. “There are also grants and aid, in addition to foreign direct and indirect investments.”
These limited resources should help the CBE meet its monthly debt in dollars.
Rumours have spread that the CBE has received $1.5bn through the two loans Egypt has obtained from the World Bank and the African Development Bank in December to increase its foreign reserves during that month. The CBE, however, denied on Sunday the rumours.