Egypt reserves rise to $52.6bn

Egypt’s net international reserves climbed to $52.6 billion at the end of January 2026, underscoring steady gains in foreign currency buffers as authorities navigate currency pressures, external debt obligations and a demanding reform agenda.

Data released by the Central Bank of Egypt showed the increase from the previous month, reflecting inflows linked to multilateral financing, remittances and tourism receipts. The figure places reserves at one of their highest levels on record, providing a cushion equivalent to several months of import cover at a time when Cairo continues to manage the aftershocks of global monetary tightening and elevated commodity prices.

President Abdel Fattah El-Sisi met Central Bank Governor Hassan Abdalla to review monetary developments and the performance of the banking sector, according to presidential spokesman Mohamed El-Shennawy. Discussions focused on foreign exchange liquidity, inflation trends and the progress of structural reforms agreed with international partners. The presidency said the meeting also addressed measures aimed at bolstering investor confidence and maintaining financial stability.

Reserves have been a closely watched indicator since the pound underwent successive devaluations beginning in 2022, part of efforts to shift towards a more flexible exchange rate regime. Authorities have sought to rebuild buffers after a period in which external shocks — including the war in Ukraine, capital outflows from emerging markets and higher import bills — strained foreign currency availability.

Analysts say the latest increase suggests improved inflows from tourism and remittances, traditionally two of Egypt’s most important sources of hard currency. Tourism revenues have strengthened amid a recovery in visitor numbers, while remittances from Egyptians working abroad remain a key pillar of the balance of payments. Suez Canal receipts, another major earner, have faced volatility due to security disruptions in the Red Sea, though officials maintain that diversification of revenue streams has helped offset some of the impact.

Egypt has also secured substantial financial support from international institutions and Gulf partners over the past two years. A multibillion-dollar programme with the International Monetary Fund has anchored policy adjustments, including commitments to reduce the role of the state in the economy and expand private sector participation. Additional funding packages and investment pledges from regional allies have reinforced foreign currency liquidity.

Inflation, which surged into double digits during the currency adjustments, remains a central concern for policymakers. Annual headline inflation has eased from peaks recorded in 2023 but continues to weigh on households. The central bank has maintained a tight monetary stance, raising interest rates aggressively before pausing to assess the cumulative impact on growth and prices. Governor Abdalla has previously emphasised the need to strike a balance between curbing inflation and supporting economic activity.

Foreign investors have shown tentative signs of returning to local debt markets, encouraged by higher yields and a clearer policy direction. Portfolio inflows, however, remain sensitive to global risk appetite and shifts in United States monetary policy. Economists caution that sustaining reserve growth will depend on maintaining exchange rate flexibility and accelerating structural reforms to attract longer-term foreign direct investment.

External debt levels, which expanded significantly during years of heavy infrastructure spending, continue to shape policy choices. Servicing obligations in 2026 and beyond will require steady access to foreign currency, making reserve adequacy a strategic priority. Officials argue that strengthening buffers enhances Egypt’s ability to meet repayments without resorting to abrupt policy changes.

Banking sector indicators have remained broadly resilient, supported by high capital adequacy ratios and solid liquidity. Non-performing loan levels are manageable by regional standards, and the central bank has highlighted ongoing efforts to expand financial inclusion and digital payments. El-Sisi has repeatedly called for deeper industrialisation and export growth to reduce reliance on imports and narrow the trade deficit.

Market participants are also monitoring the government’s asset sale programme, which aims to attract private investment into state-owned enterprises. Progress on divestment has been uneven, though authorities insist that several transactions are advancing. Successful deals could generate additional foreign exchange and ease pressure on public finances.