The value of gold in Egypt’s international reserves rose sharply by approximately $2.985bn during the first four months of 2025, reaching $13.629bn in April—up from $10.644bn in December 2024. This surge played a critical role in supporting the Central Bank’s net international reserves, effectively offsetting a $2.112bn decline in foreign currency reserves.
According to data released by the Central Bank of Egypt (CBE), the net international reserves increased to $48.144bn in April, up from $47.109bn at the end of last year—marking a $1.035bn rise.
While foreign currency reserves dropped to $34.324bn from $36.436bn over the same period, Special Drawing Rights (SDRs) rose significantly, climbing from $31m in December to $194m in April—an increase of $163m.
Banking expert Mohamed Abdel Aal emphasized the strategic importance of gold in Egypt’s reserve portfolio, noting its dual role as both a cultural symbol and a financial safeguard. “Gold has always been a core component of our economic assets,” he said. “An increase in its value directly boosts the overall reserve level, serving as a positive indicator of reserve growth and stability.”
He explained that gold was a major factor in Egypt reaching a new record for foreign reserves in April, reflecting both local policy and global trends. “This isn’t about heritage—it’s a calculated strategy based on risk management and economic foresight,” he said. “Gold provides protection against market volatility and supports reserve resilience in times of crisis.”
The World Gold Council reported that Egypt increased its gold holdings by about one tonne in early 2025. The concurrent rise in global gold prices—to nearly $3,500 per ounce in April—further amplified the reserves’ value.
Abdel Aal noted that continued growth in gold-backed reserves strengthens Egypt’s financial stability, improves investor sentiment, and could potentially lead to a credit rating upgrade. “It reinforces the banking sector’s ability to withstand external shocks,” he added.
In a related development, the CBE reported a marked improvement in Egypt’s net foreign assets (NFA) position in March. The banking sector’s NFA surged by $4.86bn month-on-month, reaching $15bn—compared to a net foreign liability (NFL) of $4.19bn in March 2024.
Excluding the Central Bank, the banking sector recorded a net foreign asset position of $2.53bn in March 2025, reversing a $1.92bn liability from February and improving from a $2.82bn liability a year earlier.
Heba Mounir, Macro Analyst at HC Securities and Investment, attributed the improvement to a $4.51bn month-on-month rise in total foreign currency assets across banks—excluding the CBE—while liabilities remained stable. “This reflects a tangible improvement in foreign currency liquidity,” she said.
She added that Egypt attracted $2.7bn in foreign direct investment (FDI) in the first quarter of 2025—a 15% year-on-year increase. Additionally, Egypt received a $1.2bn tranche from the International Monetary Fund under its $8bn Extended Fund Facility, further bolstering the banking sector’s liquidity and resilience.
Reported by dailynewsegypt
