Egypt just notched a $1.48 billion rise in its net foreign assets in February — its second consecutive monthly gain this year. That’s a much-needed shift after three rough months of outflows in late 2024. Central bank data shows foreign investors are eyeing Egyptian treasury bills again — and it’s starting to show in the books.
After a shaky period of currency pressure and investor wariness, Egypt seems to be clawing back some ground in the financial markets. But is it a trend or just a blip?
A Break from the Downtrend as Reserves Cross $10 Billion Again
There’s something comforting about crossing back into double digits.
At the end of February, Egypt’s net foreign assets (NFAs) climbed to $10.18 billion, up from $8.70 billion in January. That’s not just a round number milestone — it’s a psychological one too.
According to Reuters calculations based on official exchange rates, this marks the strongest position Egypt has held in nearly a year. The turnaround follows a string of declines in Q4 of 2024 that had many economists concerned.
And where’s the money coming from? According to one unnamed banker, foreign investors have been diving back into Egyptian treasury bills — short-term government debt — attracted by high yields and growing confidence in Egypt’s fiscal outlook.
This might be the early signs of a thaw.
Bond Sales Open the Floodgates, IMF Adds to the Tailwind
January’s bond sale was more than just a headline — it was a financial pressure valve finally being turned.
On January 29, Egypt returned to global debt markets for the first time in four years, selling $2 billion in dollar-denominated bonds. That move brought in desperately needed liquidity and signaled renewed global interest in Egypt’s debt — a key component in restoring balance to its foreign reserves.
Then came the IMF.
In March, the International Monetary Fund approved its fourth review of Egypt’s $8 billion support program, unlocking an immediate $1.2 billion and paving the way for another $1.3 billion under the Resilience and Sustainability Facility. These cash injections are crucial, especially as Egypt tries to rebuild credibility with investors while managing a local economy that’s still under pressure from inflation and a weakened currency.
Quick Glance at Egypt’s Recent NFA Performance
Let’s take a look at how Egypt’s net foreign assets have shifted over the past few months:
| Month | Net Foreign Assets (USD) | Notable Factors |
|---|---|---|
| Oct 2024 | -$2.7 billion | Continued capital outflows |
| Nov 2024 | -$1.5 billion | Political uncertainty, FX pressure |
| Dec 2024 | -$0.9 billion | Early signs of investor return |
| Jan 2025 | +$8.70 billion | $2B bond sale restores liquidity |
| Feb 2025 | +$10.18 billion | Treasury bill demand boosts assets |
This shift isn’t random. It’s driven by confidence.
Commercial Banks Join the Rally While Liabilities Shift Gears
This isn’t just a story of the central bank filling up its reserves. Commercial banks have been part of the turnaround too.
In February, foreign assets rose at both the central bank and commercial banks, showing that liquidity is spreading across the system — not just sitting in a vault. That’s usually a good sign. It means the broader financial sector is feeling more secure.
But here’s the twist: while foreign liabilities rose at the central bank, they actually fell at commercial banks. So, even as the central authority takes on more short-term debt or swaps, the private sector is balancing its foreign exposure more cautiously.
That’s a mixed picture — but overall, still a net positive.
One banker close to the situation said the treasury bill interest was mostly driven by Gulf and European investors who were chasing higher yields in emerging markets. Egypt, offering double-digit returns in local currency debt, looks more attractive again, especially after its recent currency devaluation brought its real interest rates back above water.
Long-Term Trends Still Loom, But for Now, Cairo Breathes Easier
It hasn’t been an easy ride.
Egypt’s net foreign assets turned negative back in February 2022, as the country burned through reserves to defend its currency. Since September 2021, the central bank had been dipping into foreign assets to cushion the pound, keep inflation in check, and smooth over turbulent capital flows.
They only flipped back into positive territory in May 2024, but that was just the start of the rebuild.
Now, with a more consistent uptick, some believe Egypt’s financial strategy is finally starting to pay off — albeit slowly.
But let’s be real — challenges remain. Inflation’s still high. Imports are expensive. The currency remains under pressure. And political risk never completely disappears in this region.
Still, the February figures offer a glimmer of hope. Maybe, just maybe, Egypt is finally catching a break.
