The Clap
The net foreign assets deficit increased in August 2022 to reach -$19.7 billion.
What this Means
Negative net foreign assets indicate that a country’s foreign currency-denominated liabilities are greater than its foreign currency assets.
The Deets
In August 2022, banks’ foreign currency liabilities increased by 7%, while their foreign currency assets decreased by 2%.
Analysts said that the deficit in August 2022 was in line with expectations, with the rise in payable debt leading to a rise in foreign currency liabilities.
Why this Matters
Since the start of 2022, Egypt has been facing an economic crisis due to the large outflow of foreign currency from the Egyptian market following the Russian-Ukrainian war, which negatively impacted foreign reserves.
Foreign currency liabilities exceed assets for CBE 💲
