Egypt’s foreign reserves fell to US$ 13.6 billion last January after paying the half-yearly installment of US$ 700 million loans to Paris Club member countries, said Ismail Hassan, chairman of Misr Iran Development Bank and former governor of the Central Bank of Egypt (CBE).
The foreign reserves are money and gold held by the CBE outside the country that are used to pay for the country’s basic necessities. Hassan noted that foreign reserves become the main resource for foreign funds after the turmoil that followed 2011’s revolution and its negatives repercussions on economy.
During an interview with Alashan Bokra talk show, Hassan affirmed that the political instability and security chaos have negatively affected foreigners’ investments in dollar T-bills and made them divest from Egypt, placing more pressure on international reserves.
He pointed out that Egypt had a same crisis in 1997 after Luxor massacre, but the country had managed to pass this crisis by taking prompt security measures to restore order and regain confidence of foreign investors and tourists in Egypt.
Hassan emphasized on the importance of implementing the required procedures to stabilize the political situation and restore security in order to stimulate economic recovery.
Borrowing is one of the solutions to increasing foreign reserves, but the optimal solutions are seeking political stability and increasing production.
