Egypt’s banking sector net foreign assets surged by US$20.3 billion in 2025, reflecting an improved external position and favourable exchange rate developments, the Central Bank of Egypt said on Sunday.
According to a monetary policy report released by the Central Bank of Egypt, total net foreign assets (NFA) of the banking sector rose by US$4.7 billion in the fourth quarter alone to reach US$25.5 billion in December, up from US$20.8 billion at the end of September. The December figure marks the highest level recorded since July 2012.
The central bank’s own NFA increased for the eighth consecutive month, reaching US$15.1 billion in January 2026, compared with US$13.3 billion in December 2025. The January level was the highest since September 2021. The CBE attributed part of the rise to higher global gold prices, which boosted the valuation of reserve assets.
Commercial banks also recorded significant gains. Their net foreign assets climbed by US$2.4 billion to US$12.2 billion in December 2025, the highest level since February 2014. The central bank said the increase was supported by stronger foreign currency inflows, including remittances from Egyptians working abroad and rising foreign investment in Egyptian government debt instruments.
Net foreign assets measure the difference between foreign assets held by the banking system such as foreign currency reserves, gold and overseas deposits and foreign liabilities. A positive and rising NFA position is widely regarded as an indicator of stronger external liquidity and improved capacity to meet foreign obligations.
The CBE said the upward trend in 2025 was consistent with improvements in Egypt’s external economic situation and exchange rate developments since April. Authorities have pursued policies aimed at strengthening foreign currency inflows and restoring confidence in the official foreign exchange market.
Egypt’s external position has faced periodic pressures over the past decade, particularly following global shocks that affected tourism revenues, capital flows and import costs. Policymakers have since focused on rebuilding reserves, attracting foreign investment and enhancing foreign currency liquidity within the banking system.
Analysts say the sustained rise in net foreign assets could support exchange rate stability and ease pressures on domestic liquidity conditions. However, they note that maintaining the improvement will depend on continued inflows from remittances, exports, tourism and portfolio investment, as well as prudent external debt management.
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The central bank did not provide forward guidance but reiterated its commitment to maintaining monetary and financial stability amid evolving global conditions.
Net foreign assets (NFA) are a closely watched gauge of Egypt’s external financial health, reflecting the difference between foreign assets held by the banking system and its foreign liabilities. A sustained rise in NFA is widely viewed by policymakers as a sign of improving foreign currency liquidity and stronger resilience against external shocks.
Egypt’s foreign asset position has fluctuated sharply over the past decade. Following the 2011 uprising, foreign reserves declined significantly amid capital outflows and weaker tourism revenues, leading to foreign exchange shortages and pressure on the Egyptian pound.
A reform programme supported by the International Monetary Fund in 2016, which included the flotation of the currency and fiscal adjustments, helped restore investor confidence and rebuild reserves. However, subsequent global disruptions including the COVID-19 pandemic and tightening global financial conditions again strained foreign currency inflows and heightened exchange rate volatility.
The Central Bank of Egypt manages the country’s official reserves and regulates banks’ foreign currency exposure. Movements in the exchange rate, global commodity prices and capital flows directly affect the banking sector’s net foreign asset position.
Gold holdings form part of Egypt’s foreign reserves and rising global gold prices increase the valuation of those reserves. In recent years, gains in gold prices have contributed to strengthening the central bank’s external balance sheet.
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Remittances from Egyptians working abroad remain one of the country’s largest sources of foreign currency. Authorities have introduced measures aimed at encouraging remittance flows through formal banking channels, supporting liquidity in the official foreign exchange market.
Foreign investment in Egyptian treasury bills and bonds also plays a key role. Portfolio inflows boost foreign currency availability, although such flows can be sensitive to global interest rate shifts and investor risk appetite.
Since April 2025, policymakers have pointed to exchange rate developments as supporting improved external conditions. A more flexible currency regime is intended to reduce distortions, attract capital and enhance transparency in foreign exchange transactions.
The levels recorded in late 2025 mark the strongest external position for the banking sector in more than a decade, according to official data. Analysts say sustaining this momentum will depend on continued export growth, tourism recovery, remittance inflows and prudent external debt management.
