In the Financial Stability Report, the Central Bank of Egypt reviewed a set of scenarios of potential risks that the Egyptian economy may be exposed to, and how the Central Bank may deal with them during the next year.
The Egyptian Central Bank addressed the external pressures that the second wave of the pandemic may cause, which may lead to the exodus of foreign capital from Egypt, and negatively affect foreign exchange sources. The bank revealed the ability of the Egyptian economy and banking sector to absorb the consequences of the Corona pandemic on foreign currency resources, which contributed to reducing pressure on the exchange rate, the low market risk of the banking sector, and the absence of systemic risks related to foreign capital fluctuations, which strengthened financial stability without resorting to macro-prudential policy to activate its tools.
The Egyptian economy was able to contain the reversal in portfolio investment flows thanks to its relatively stable sources of foreign currency, and the formation of a large net foreign currency reserve, which amounted to $ 45.5 billion last February, which enabled it to address the consequences of the crisis by using $ 5.4 billion in March 2020. Net assets recorded inflows of $ 8.5 billion from January to March 2020. While net international reserves rose in June 2020 to $ 38.2 billion.
Source (Al-Arabiya.net, Edited)
