Cairo – Mubasher: Egypt witnessed an 8.43% drop ($14.17 billion) in its external debt to $153.86 billion at the end of May 2024, compared to $168.03 billion as of 31 December 2023.

A high-ranking official at the Central Bank of Egypt (CBE) revealed that this decline during the five-month period is considered the largest in the history of the Arab Republic’s external debt.

Meanwhile, the CBE’s net foreign reserves recorded their highest levels at $46.38 billion in June 2024, marking an increase of $13.26 billion since August 2022.

The source also highlighted a 200% surge in foreign exchange flows to the local market, including an increase of more than 100% in remittances from Egyptians abroad compared to their levels before unifying the exchange rate.

Additionally, the official indicated that the strong in currency flows contributed to eliminating the net foreign assets deficit of the CBE to record a surplus of $10.30 billion in June 2024, compared to a deficit of $11.40 billion in January 2024.

Net foreign assets of banks also hiked $4.60 billion in May 2024, compared to negative $17.60 billion in the same month in 2023.

The monetary policy decisions since August 2022 managed to control inflation rates, registering a slowdown to reach the level of 27.50% in June 2024, which is the lowest rate since February 2023. This led to regaining investors’ confidence in the local currency and investment environment for the Egyptian economy.

Moreover, the source at the CBE noted that there was a growth in the yield curve on Egypt’s Eurobond maturing January 2027, as it declined from 22.86% in October 2023 to 9.20% in June 2024, with a decrease of 13%, which contributes to lowering the cost of borrowing from international markets.

The one-year credit default swap contracts also enhanced by nearly 2,333 basis points between May 2023 and June 2024 to reach 346.3 basis points.

In the first quarter (Q1) of 2024, Egypt’s external debt retreated by 4.40% to $168.03 billion from $160.60 billion in Q4-23.