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Foreign reserves drop to US$18.53 billion in July

Egypt’s foreign reserves fell to US$18.53 billion in July, dropping by 7.7 percent from US$20.05 billion at the end of June.

The decline is due partly to a US$670 million debt payment made to the Paris Club in July. Egypt has also been hit by gold prices, which are currently hovering at a five-and-a-half year low.

In June, Egypt’s gold holdings amounted to US$2.4 billion of foreign reserves, almost 12 percent of the total value, according to Central Bank figures. July data is not yet available.

The country’s foreign reserves stood at US$36 billion on the eve of the 2011 revolution, but years of economic instability have made it difficult for the country to maintain a comfortable cushion of reserves.

Tourism and foreign investment fell off drastically after the revolution and have proven slow to recover. Meanwhile, the country faces a widening trade deficit and the Central Bank has had to hold regular foreign exchange auctions and enact currency controls in order to keep the exchange rate for the Egyptian pound from falling sharply against the dollar.

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