The net balance of foreign exchange (FX) reserves at the Central Bank of Egypt (CBE) increased by 42% at the end of October 2018, up from $44.459bn in September 2018, to reach $44.501bn, according to the CBE.
This is the highest level of FX reserves in history, covering 8.5 months of basic commodities imports.
According to the CBE, the value of gold listed on the FX exchange increased by $86m in October 2018, up from $2.545bn at the end of September, to reach $2.631bn, which had a great impact on increasing reserves in October.
In contrast, the volume of foreign currencies included in the reserves declined by $36m, from $41.253bn in September down to $41.217bn.
The value of special drawing rights declined by $8m, from $643m in September to $651m, while loans to IMF registered $14m.
The decision to liberalise the exchange rate, which was taken by the CBE on 3 November 2016, contributed to increasing FX reserves by $25bn in the first two years. Up from $19.5bn in October 2016, FX reserves hiked to $45.501bn at the end of October 2018. The increase was partially driven by hard cash inflows and loans from abroad.
One of the main factors contributing to the increase in reserves was the rising remittances of Egyptians working abroad from $17bn before the decision to liberalise the pound which increased the reserves to $26.5bn in the fiscal year 2017/18.