Egypt foreign currency reserves fall again

  • 5 February 2013
  • From the section Business
Protesters in Cairo
Image caption Continued political unrest has hurt Egypt's economy since the revolution two years ago

Egypt's dwindling foreign currency reserves fell 10% in January, according to the country's central bank.

The bank said reserves fell by $1.4bn during the month from $15bn to $13.6bn amid continued political unrest and violent street protests.

The figures again raise concerns over the state of Egypt's economy and the government's finances.

The economy has stagnated since the revolution to oust former President Hosni Mubarak in 2011.

The central bank gave no reason for the fall in a statement published by the state news agency Mena.

But economists say the continued political instability in Egypt has crippled the tourism sector - an important earner of foreign currency - and discouraged foreign investment.

Critical levels

In the last two weeks, violent protests have again erupted in Cairo and other cities among opponents of the Islamist President Mohammed Morsi in Cairo and the cities of Port Said and Suez close to the Suez canal.

Egypt's foreign currency reserves are needed to pay for imports, in particular food and fuel.

In December, the central bank said its reserves, then totalling $15bn, had reached critical levels and were only enough to cover three months of imports.

Reserves stood at $36bn before the uprising against Hosni Mubarak.

The government is still hoping to renew talks with the International Monetary Fund for a $4.8bn loan to shore up its finances.

Those talks were put on hold in December amid political turmoil surrounding a new constitution.

Egypt is also in talks with the European Union over a $900m loan, along with smaller loans from the US and the African Development Bank.

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