Egypt's Central Bank Sees Gold Price Gains Boost Reserves to $57.2 Billion

The Central Bank of Egypt reported a significant increase in its foreign exchange reserves to $57.2 billion at the end of August, driven by higher gold prices. The value of the bank's gold holdings jumped to over $19 billion from $17.1 billion in July, an increase of $1.9 billion. This rise is attributed to 'price gains' from revaluing existing holdings as global gold prices rose by about 10%.

The increase does not reflect a broad buildup of reserves. The foreign currency component of the reserves fell by about $1.2 billion in August to $37.5 billion, indicating increased demand for dollars to pay for imports. Egyptian imports rose to $12.4 billion in June, 50% higher than in the same month a year earlier.

Ibrahim Adel, a macroeconomic analyst at Mubasher Trade, attributed the increase in gold reserves value to 'price gains' rather than new purchases. He noted that the decline in foreign currency holdings may be driven by payments for Egyptian imports during the month.