Egypt’s external debt registered $137.4 billion in September 2021, down about $439.5 million from the end of June 2021, according to the Central Bank of Egypt.
Despite the increase in net disbursements of loans and facilities of $366.7 million, the depreciation of the US dollar exchange rate against the other currencies making up the external debt resulted in a decrease of $806.2 million. dollars of book value.
By original maturity, external debt reaffirmed its pattern of predominance of long-term debt in September 2021. Long-term debt represented $125.9 billion, or 91.6% of total external debt, while short-term debt accounted for $11.5 billion or 8.4%.
By residual maturity, short-term debt represented 22.1% of total external debt in September 2021, compared to 8.4% classified by original maturity.
At the same time, the long-term debt expressed in terms of residual duration represented 77.9% of the total external debt, against 91.6% according to the initial duration.
Long-term external debt recorded $125.9 billion (91.6% of total external debt) in September 2021, up about $1.8 billion from June 2021; of which :
Debt of multilateral institutions reached approximately $52.7 billion, up $2.7 billion from end-June 2021. This increase reflects new lending; mainly from the IMF ($24.1 billion classified as follows: $11.9 billion representing the Extended Financing Facility, $2.9 billion representing the Rapid Financing Instrument (RFI), $5.3 billion representing three Stand-By Arrangement (SBA) tranches and $4.0 billion representing SDR allocations).
This is in addition to loans from the International Bank for Reconstruction and Development (IBRD) ($11.6 billion), the European Investment Bank (EIB) ($5.4 billion) and the Arab Fund for economic and social development ($2.1 billion).
Bonds issued abroad (holdings of non-residents) reached $31.6 billion, up $2.9 billion.
The stock of bonds outstanding as of September 2021 includes: approximately $26.1 billion of Eurobonds issued in US dollars, approximately $737.2 billion of green bonds issued in US dollars, approximately $4.4 billion dollars of Eurobonds denominated in Euros; and approximately $355.4 million in sovereign notes.
Buyer and supplier credit reached about $12.4 billion, down $352.1 million. Other bilateral debt amounted to some $11.2 billion, down $194.3 million. Repurchase agreements (Repo) recorded $4.0 billion in September 2021.
Long-term deposits placed with the ECB by selected Arab countries decreased to $12.0 billion, down $3.0 billion. These deposits break down as follows: $5.7 billion by the United Arab Emirates; $2.3 billion from Saudi Arabia; and $4.0 billion from Kuwait.
Rescheduled bilateral debt reached approximately $1.6 billion, down $319.0 million. Private sector unsecured debt recorded $457.9 million, up $66.0 million.
Short-term debt decreased by about $2.2 billion to about $11.5 billion, or 8.4 percent of total external debt. Its ratio to net international reserves fell to 28.1% in September 2021 from 33.8% in June 2021.
Measuring the currency composition of Egypt’s external debt is an important indicator that sheds light on the exposure of external debt to volatility in foreign exchange markets. The currency composition of the debt indicates that the US dollar is the primary borrowing currency ($82.9 billion). The other major currencies recorded $54.5 billion, broken down as follows: the SDR4 followed ($25.3 billion), followed by the euro ($17.2 billion), the Kuwaiti dinar (3. $8 billion), Chinese yuan ($3.7 billion), Japanese yen ($2.5 billion) and other currencies ($2.0 billion).
The breakdown of debt by creditor indicates that $52.7 billion was owed to multilateral institutions5 (mainly; IMF $24.1 billion, IBRD $11.6 billion, EIB $5.4 billion and ADF and AfDB $3.0 billion).
It is worth mentioning that the IMF has approved a general allocation of Special Drawing Rights (SDRs) to its member countries of about 456.5 billion SDRs (equivalent to $650 billion) starting August 23, 2021, to boost global liquidity. This allocation is meant to supplement countries’ foreign exchange reserves and reduce their reliance on more expensive domestic or external debt to help countries cope with the economic and social impact of the COVID-19 crisis. Egypt’s share of this new allocation is approximately SDR 1,952.5 million (equivalent to $2.8 billion), which represents 95.8 percent of its current IMF quota (2,037.1 million SDRs). In addition, $19.7 billion was owed mainly to Arab countries; United Arab Emirates (6.5% of total external debt), Saudi Arabia (3.0%) and Kuwait (4.3%). Meanwhile, $9.3 billion came from five Paris Club member countries, namely; Germany ($2.8 billion), Japan ($2.6 billion), United Kingdom6 ($1.9 billion), France ($1.6 billion) and United States ($0.4 billion). of dollars). Additionally, $6.7 billion was owed to China.
The structure of Egypt’s external debt by debtor sector in September 2021 reveals that the state remains the main debtor, with a share of around 60.1% of external debt. Its debt increased by $186.5 million in September 2021 compared to the end of June 2021, to reach $82.6 billion. Banks’ external debt increased by about $12.5 million to $14.5 billion. The debt of the other sectors increased slightly by some $3.3 million to reach $15.5 billion. On the other hand, the external debt of the Central Bank decreased from about $641.8 million to $24.9 billion.
Debt service reached $9.4 billion (principal repayments recorded $8.2 billion and interest payments $1.2 billion) in July/September 2021/2022, compared to 4, $9 billion in July/September 2020/2021. The increase mainly reflects the increase in principal repayment of approximately $4.6 billion, while interest payment declined by approximately $6.4 million.
As for external debt in terms of international comparison, Egypt’s debt remains within manageable limits. Based on the IMF classification, comparing Egypt’s main debt indicators with those of other regional country groups8 shows that Egypt’s stock of debt to GDP was 32.6% in September 2021 (55.5% for the Latin America and Caribbean average and 53.7% for the Middle East and Central region). average for the Asian region).
Egypt’s short-term external debt relative to total external debt as of September 2021 stood at 8.4% (12.6% for Latin America and the Caribbean average and 21.2% for the average for the Middle East and Central Asia region).
Egypt’s debt service ratio9 stood at 40.8% in the year ended September 2021 (59.8% for the Latin America and Caribbean average and 32.3% for the Middle East and Central Asia average).
At the same time, debt service on current receipts represented 24.7% for the financial year ended in September 2021.
Net international reserves
During July/September 2021/2022, the TNI increased by $0.2 billion (compared to an increase of $0.2 billion in the corresponding period a year earlier) to reach $40.8 billion, thus covering 6.1 months of goods imports in September 2021.
This rise is the result of the rise in SDRs by $2.6 billion and the fall in foreign currencies by $2.3 billion and gold by $0.1 billion.
At the time the report was prepared, the TNI reached $41.0 billion in January 2022, covering 6.2 months of merchandise imports.
Banks’ net foreign assets decreased by $5.0 billion in July/September 2021/2022 (compared to an increase of around $4.3 billion in the corresponding period a year earlier).
Foreign currency deposits with banks decreased by 1.3% during the reporting period, reaching $41.0 billion in September 2021. In contrast, local currency deposits increased by 5.1%. As is
the ratio of foreign currency deposits to total deposits increased by 13.2% in September 2021.
Egypt’s IIP+ recorded net foreign liabilities (assets minus liabilities) of around $223.2 billion in September 2021, up 2.7% from $217.4 billion in June 2021. This increase in negative net IIP is mainly attributed to higher liabilities from Egypt compared to end-June 2021.
Assets fell 5.4% to approximately $74.2 billion in September 2021 from $78.4 billion in June 2021.
This decrease is mainly due to the following developments:
Other investment assets decreased by 15.7% to approximately $24.6 billion.
Reserve assets edged up 0.6% to approximately $39.7 billion.
Direct foreign investment rose 1.0% to approximately $8.8 billion.
Foreign portfolio investment rose 5.8% to approximately $1.1 billion.
Liabilities increased 0.6% to approximately $297.4 billion in September 2021 from approximately $295.8 billion in June 2021.
This increase mainly reflects the following developments:
Portfolio investment in Egypt rose 6.5% to approximately $55.8 billion.
foreign direct investment in Egypt increased by 1.2% to approximately $135.9 billion.
Liabilities of other investments decreased by 3.1% to approximately $105.7 billion.
Egypt’s negative net IIP to GDP improved to around 52.9% in September 2021 from around 59.7% in June 2021.
Assets to liabilities decreased to around 25.0% in September 2021 from around 26.5% in June 2021.
The IMF allocated about 456.5 billion SDRs (equivalent to $650 billion) to its member countries on August 23, 2021.
Egypt’s share of this allocation is approximately SDR 1,952.5 million (equivalent to $2.8 billion), recorded at the IIP as an increase in long-term liabilities related to Central Bank reserves. Egypt (SDR allocation) and reserve assets (SDR holdings) on the asset side.
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