CAIRO: Egypt’s central bank said on Thursday it had reached a $2 billion financing agreement with a consortium of international banks, in a deal aimed at boosting foreign reserves as the government pushes ahead with economic reforms.
Egypt has been negotiating billions of dollars in aid from various lenders to help revive its economy, battered by political and economic upheaval since a 2011 uprising.
It expects this week to clinch final approval for a $12 billion three-year loan from the International Monetary Fund. That agreement would support an ambitious reform program that saw the central bank take the dramatic step last week of floating its currency, the pound.
The central bank said the repurchase agreement announced on Thursday had a maturity of one year, with the banks providing funds against international bonds newly issued by the finance ministry and listed on the Irish Stock Exchange.
“The transaction bolsters the liquidity and size of the international reserves of the central bank,” the central bank statement said. “This transaction complements a series of measures taken recently in order to unleash the vast potential of the Egyptian economy and instil confidence by normalizing local market conditions and bolstering economic activity.”
Egypt’s foreign reserves have plummeted from about $36 billion on the eve of the 2011 revolt to about $19 billion in October as it has struggled to bring back tourists and foreign investors put off by years of turbulence.
With its deficit widening and a currency black market booming, Egypt has embarked on a series of reforms to restore investor confidence, including major subsidy cuts and the introduction of a value-added tax.
“This deal signals a positive monetary-fiscal cooperation and less reliance on foreign support and more on international markets. This is positive for sentiment,” said Hany Farahat, senior economist at CI Capital.
The finance ministry said it had issued $4 billion of international bonds as a private placement for the central bank on Wednesday.
The placement includes a $1.360 billion bond with 4.62 percent interest maturing in December 2017, a $1.320 billion bond with 6.75 percent interest maturing in November 2024, and $1.320 billion bond with 7 percent interest maturing in November 2028.
It said the placement would not affect its plans to issue a $2 billion to $2.5 billion euro bond by the end of the year, although the exact timing would depend on global market conditions and the fallout of Donald Trump’s victory in the US election. Egypt had planned to start a roadshow for its international bond sale in late November.
“This is just bridge financing until we get the Eurobond by January,” said Hany Genena, head of research at Cairo-based Beltone Financial. “The $4 billion is like collateral.” Coming two days after the IMF signalled it would approve Egypt’s $12 billion loan program, news of the financing deal helped buoy Egypt’s newly floated pound on Thursday.
Egypt devalued the pound by about a third last week from its former peg of 8.8 against the dollar and has since allowed it to drift lower. A shortage of dollar liquidity resulted in low volumes and saw the pound weaken to 18 versus the dollar when markets opened on Sunday for the first time since the float.
Egypt central bank in $2bn financing deal with global banks
Egypt central bank in $2bn financing deal with global banks
Gold slips over 1 percent on strong dollar, easing rate-cut bets
- Chile central bank issues first gold purchase in decades
- BMI expects silver to average $93/oz in 2026
Gold prices fell more than 1 percent on Thursday, pressured by a stronger dollar and diminishing hopes for a reduction in borrowing costs as the ongoing Iran war stoked inflation concerns.
Spot gold dipped 1.1 percent at $5,118.16 per ounce by 1:31 p.m. ET (1731 GMT). US gold futures for April delivery settled 1 percent lower at $5,125.80.
The dollar gained for a third consecutive session. The greenback is a competitive safe-haven asset, and a stronger US currency makes gold more expensive for holders of other currencies.
“The higher dollar index, rising treasury yields and lack of interest-rate cuts are the negative factors, but the conflict in the Middle East has been generating some safe-haven flows,” said Phillip Streible, chief market strategist at Blue Line Futures.
Two tankers were ablaze in Iraqi waters in an apparent escalation in Iranian attacks that have cut off Middle East energy supplies. In reaction, oil prices rose sharply for the day.
Iran will avenge the blood of its martyrs, keep the Strait of Hormuz closed and attack US bases, new Supreme Leader Ayatollah Mojtaba Khamenei said.
Higher crude prices feed into inflation by raising transportation and production costs. Gold is considered an inflation hedge, but high interest rates weigh on it by making yield-bearing assets more attractive.
“If they can prevent oil prices from climbing further, gold should be in a good place... On the bullish side for gold, the main argument is that central bank buying and steady exchange-traded fund inflows, which have remained positive all year,” Streible added.
Chile’s central bank issued its first major gold purchase since at least 2000. In February, the bank boosted its gold reserves to $1.108 billion, up from $42 million in January, equivalent to 2.2 percent of total reserves.
Elsewhere, spot silver eased 1 percent to $84.90. Prices gained more than 146 percent last year.
Analysts at BMI wrote in a note they expect silver to average $93 per ounce in 2026, with strong investment demand consolidating the gains witnessed in 2025, and offsetting price-induced demand destruction in solar panels and jewelry.
Spot platinum lost 1.1 percent to $2,145.75, and palladium fell 1 percent to $1,620.86.
