Egypt's foreign reserves fall to lowest in 4 years

Thu May 5, 2011 2:13pm GMT

By Dina Zayed

CAIRO (Reuters) - Egypt's net foreign reserves fell to their lowest in four years in April, reaching $28.02 billion, as the economy of the Arab world's most populous state stumbles after a popular uprising unseated its president.

The unrest that began on January 25 chased away tourists and foreign investors and crimped exports, among Egypt's main sources of foreign exchange.

Egypt drew down foreign reserves by almost $6 billion in the first three months of this year to $30.1 billion at the end of March. Unofficial reserves fell $7 billion.

Foreign reserves fell by another $2 billion during April, a 19 percent decline from a year earlier and 6.9 percent from March 2011. Analysts expect the drop to continue.

Investment bank Beltone Financial wrote in a note it expected net international reserves to fall to $26 billion by the end of June.

"The continued deterioration in net international reserves reflects the fall of $2 billion in foreign currency reserves," Beltone said.

Foreign currency reserves were $24.5 billion by the end of April.

Credit Agricole analysts said: "FX reserves could reach about $20 billion at the end of 2011 should financial pressure remain significant. This is about four to five months of imports, which is neither comfortable nor acutely alarming".   Continued...

<p>One Euro coins are pictured after being minted at the Austrian national mint in Vienna April 8, 2009. REUTERS/Leonhard Foeger</p>
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