The Banking Executive Magazine - February 2025 Issue

Egypt’s Banking Sector Egypt’s Banking Sector SEES $37.8BLN SURGE IN NET FOREIGN ASSETS OVER ONE YEAR Egypt’s banking sector, encompass- ing both the Central Bank of Egypt (CBE) and commercial banks, has ex- perienced a dramatic recovery in net foreign assets (NFA) over the past year. The sector’s NFA surged from a record low of negative $29bn in Jan- uary 2024 to a positive $8.7bn in January 2025, marking an impressive $37.8bn turnaround. The CBE played a major role in this recovery, contributing $23.5bn of the total increase, while commercial banks saw their NFA improve by $14.3bn during the same period. On a monthly basis, the sector’s NFA rose from $5.2bn in December 2024 to $8.7bn in January 2025, reflecting a $3.5bn increase—the highest monthly jump since May 2024. At the CBE level, net foreign assets edged up from $11.7bn in December 2024 to $12.0bn in January 2025, a $0.4bn gain. Meanwhile, commer- cial banks significantly reduced their NFA deficit, improving from negative $6.4bn in December 2024 to nega- tive $3.3bn in January 2025, a $3.1bn improvement. The sharp recovery in commercial banks’ net foreign assets was prima- rily driven by a $4bn rise in foreign assets, fueled by higher foreign cur- rency inflows, including remittances from Egyptians abroad and increased foreign investments in Egyptian gov- ernment debt instruments. Addition- ally, a $1bn decline in external liabilities further bolstered the sec- tor’s positive shift, reinforcing confi- dence in Egypt’s financial stability. ISSUE 194 FEBRUARY 2025 the BANKING EXECUTIVE 43