(Bloomberg) -- Egypt's external finances improved following the Nov. 3 decision to float the pound, the central bank said, as inflows from investments, remittances and exports picked up.
The balance of payments surplus grew to $5.1 billion in the October to December period, from $1.9 billion in the previous quarter, the regulator said in a statement on its website. The trade deficit narrowed to $9.2 billion from $9.6 billion a year earlier, while workers' remittances increased 12 percent to $4.6 billion.
Egypt removed restrictions on its currency four months ago in a bid to end a foreign currency crisis that crippled economic growth, paving the way to a $12 billion International Monetary Fund loan. Foreign currency inflows to the equity and debt markets have been growing while the government managed to increase borrowing from international financial institutions and friendly nations.
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Foreigners purchased a net $395 million in stocks in the period after selling a net $135 million a year earlier. They were net buyers of Treasury bills at $632 million versus net sellers of $10 million a year earlier.
Data for the full second half of 2016 were less encouraging. The current account, which measures incoming and outgoing goods, services and transfers, registered a deficit of $9.6 billion versus $9.4 billion a year earlier. Tourism continued to struggle with revenue falling to $1.6 billion from $2.7 billion.
The current account from October through December improved by 6.4 percent compared with the previous quarter, and by 13.1 percent compared with the year-earlier period, the central bank said.
Here are some highlights from the balance of payments report released Wednesday:
- July-December balance of payments reached a surplus of $7 billion versus a deficit of $3.4 billion a year earlier
- Trade deficit narrowed 10.1 percent to $17.9 billion in same period
- Imports fell to $28.3 billion from $29 billion
- Exports grew to $10.5 billion from $9.1 billion
- Net foreign direct investment increased to $4.3 billion from $3.1 billion
- Net portfolio investment was $213 million versus $1.6 billion outflow
- Net borrowing was $6 billion versus $3.8 billion
- Central bank liabilities registered a net inflow of $8.1 billion versus $1.5 billion. Banks' liabilities registered a 38 percent drop in inflows to $1.46 billion
- Suez Canal revenue fell 5% to $2.5 billion
To contact the reporter on this story: Ahmed Feteha in Cairo at afeteha@bloomberg.net.
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Amy Teibel, Stuart Biggs
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