Egyptian Central Bank
Egypt’s economy
Expectations of negotiations to extend deposit terms in light of the dollar scarcity crisis
Once again, Egypt is entering a challenge related to the payment of foreign debts due in the coming months of the current year 2023, according to a crowded schedule.
And the Central Bank of Egypt stated in a report on the debts owed by Egypt during the coming months that it might, by next April, pay two billion dollars, half of the Kuwaiti deposit, which amounts to a total of $4 billion, while the second half of it, worth two billion dollars, will be due next September.
Part of a $2 billion Emirati deposit is due to be paid next month, along with another $1 billion due in July 2023.
Estimates of economic researchers and research centers indicate that Egypt will seek to extend the term of these deposits and postpone their payment at a time when the country is witnessing a crisis of dollar liquidity and the decline of the Egyptian pound against foreign currencies, which led to the rise of the inflation curve to historical levels.
The value of Arab countries’ deposits with the Central Bank of Egypt currently amounts to $28.2 billion in short and long-term deposits, and nearly half of this amount is deposits provided by Saudi Arabia, the UAE and Qatar during the past year to support Egypt’s foreign exchange reserves after the outbreak of the Russian-Ukrainian war and its aftermath. Economic crisis.
foreign exchange reserves
According to the schedule for repayment of Egypt’s debts, the Kingdom of Saudi Arabia has a deposit of $5 billion due in October 2026, and another of $5.7 billion to the United Arab Emirates gradually.
Net foreign exchange reserves at the end of last February amounted to $34.352 billion, up from $34.224 billion in January 2023.
The total value of Egypt’s obligations during the current fiscal year 2022-2023, which began last July and ends next July, is about $20.2 billion, of which about $8.7 billion during the first half that ended in December 2022, according to Central Bank data published in its report. on his website.
In a previous report, Oxford Economics Africa revealed that Egypt needs to “avoid the risk of default, but Egypt is not Sri Lanka – it has much higher reserves and much better financing options in the future, and Egypt’s problem can be controlled through policies.” Tougher and support of official creditors.”
“The IMF is not the determining factor in the default scenario or not, and instead, it will serve as a confidence-building factor and a catalyst for another increase in pricing for the stage when emerging markets recover, then external bond markets can be resorted to,” the institution said.
$9 billion due this year
The published figures and data indicate that Egypt must pay foreign debts of about $9 billion due to be repaid in 2023, and also indicate that Egypt currently needs about $41 billion to cover debt payments and the current account deficit until the end of 2023.
According to the Central Bank of Egypt, the Arab countries own 25.1% of Egypt’s external debt, while the International Monetary Fund owns about 15% of it. Medium and long-term debts exceeded $72.4 billion by the end of 2025.
Government options
The government is struggling to collect revenues in foreign currency, whether by selling government companies to strategic investors or on the stock exchange, or by offering benefits to foreign investors when setting up projects or establishing companies and offering Egyptian citizenship in exchange for sums of foreign currency, or offering land to expatriate Egyptians, or providing facilitation in importing cars without customs duties. For a dollar deposit.
According to the medium and long-term external debt repayment schedule, Egypt must pay $8.32 billion until the end of June 2023, and in 2024, $10.9 billion must be paid in the first half and $13.3 billion in the second half of the year.
During 2025, $9.3 billion must be paid in the first half and $5.8 billion in the second half of the year. In 2026, $6.6 billion must be paid during the first half of the year, in addition to $10.2 billion during the second half.
Egypt is scheduled to pay international institutions about $3.6 billion in the first half of 2023 and $3.8 billion in the second half of it.