UPDATE 1-Egypt's foreign reserves plunge $1.7 bln in Feb
* Plunge reflects pressure on pound currency
* Analysts say fall limited compared to scale of outflows
* Balance of payments to swing sharply into deficit
(Adds central bank and analyst comments, background)
By Patrick Werr
CAIRO, March 7 (Reuters) - Egypt's net foreign reserves plunged by $1.69 billion in February, their biggest one-month decline in over a decade as political turmoil drove capital out of the country and put pressure on its currency.
The central bank played down the decline but analysts said the figure did not seem to reflect the full extent of capital outflows from the Egyptian economy.
A fall in the reserves is the best proxy for the cost under Egypt's managed float of moderating the pound's EGP= fall over the past month -- around 1.4 percent compared to a roughly 5 percent fall in the reserves.
The street protests that began on Jan. 25 and eventually toppled President Hosni Mubarak scared away tourists, foreign investors and to a lesser extent remittances from workers abroad.
Reserves fell to $33.32 billion at the end of February from $35.01 billion a month earlier, the central bank said on its website on Monday.
"It was not big, considering what Egypt just went through," central bank deputy Governor Hisham Ramez said by telephone.
He declined to go into specifics on how the reserves were drawn down.
The central bank intervened aggressively on Feb. 8 to support the pound and at the time one trader estimated the size of the intervention at "not less than $1 billion and not more than $1.6 billion." [ID:nLDE71812B]
Analysts and bankers said both Egyptians and foreigners transferred large amounts of money out of the country in February.
Some 22.5 billion pounds in treasury bills matured in February, and bankers said few foreign investors rolled over the portion they were holding, but rather cashed out and transferred the funds into dollars and out of the country.
Foreign investors, taking advantage of high yields and a relatively steady currency, had been avid buyers of Egyptian treasury bills, and at the end of November held bills worth 61.30 billion Egyptian pounds ($10.4 billion), according to central bank figures.
A central bank statement estimated on Saturday that the balance of payments would have have a deficit of $3 billion in the Jan-March quarter compared to a surplus of about $557 million in the Oct-Dec quarter.
Before the crisis, Egypt had been receiving about $1.15 billion a month from tourism, $375 million a month from foreign direct investment and $1 billion a month from worker remittances and other private transfers, according to central bank figures.
(Editing by Patrick Graham)
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