CAIRO Oct 3 Egypt's net foreign reserves rose
to $19.592 billion at the end of September, jumping from $16.564
billion at the end of the previous month, the central bank said
Egypt had roughly $36 billion in reserves before its 2011
uprising ushered in a period of political turmoil, scaring off
tourists and foreign investors, key sources of hard currency.
The International Monetary Fund last month agreed in
principle to grant Egypt a $12 billion three-year facility to
support a government reform programme aimed at reducing the
budget deficit. Board-level approval depends on the government
securing $5-$6 billion in bilateral financing in the first year.
The central bank did not immediately explain the jump in
reserves, but Egypt last month received the first $1 billion
tranche of a $3 billion World Bank loan aimed at supporting the
government's reform programme and finances.
The United Arab Emirates also agreed in August to provide
Egypt's central bank with a $1 billion deposit for six years,
while the government is in advanced talks with Saudi Arabia to
secure a new deposit worth $2-3 billion that would go towards
Egypt's central bank governor has previously said that he
would consider floating the pound, which is currently managed
within a tight band to the dollar, should net foreign reserves
exceed $25 billion.
Speculation is rife in Egypt that the central bank could
devalue the currency any day in an effort to close the gap
between the official exchange rate of about 8.8 pounds to the
dollar and the black market rate that has fluctuated at levels
weaker than 13 pounds in recent weeks.
An acute shortage of hard currency has hit business and
discouraged investment in the past two years as companies have
struggled to pay for imports and repatriate profit.
(Reporting by Lin Noueihed, editing by Larry King and Dominic