July 4, 2011 / 6:24 PM / 8 years ago

UPDATE 1-Egypt foreign reserves decline slows in June

 (Adds detail and background)
 CAIRO, July 4 (Reuters) - Egypt's net foreign reserves fell
by $659 million in June, the smallest monthly decline since the
country's political uprising chased away tourists and prompted
investors to pull funds out of Egypt.
 The central bank said on its website on Monday that
reserves dipped to $26.57 billion at the end of June from
$27.23 billion a month earlier.
 The slowdown was partly due to a month-on-month pick-up in
tourism and exports and a slowdown in investors pulling funds
out of Egypt, economists said.
 "The slowing of the outflow is a reflection that the
balance of payments deficit is narrowing," said Nada Farid, an
economist with Beltone Financial.
 The central bank has said its drawdown of reserves was a
temporary measure to cover a balance of payments gap until the
economy gets back on its feet following the uprising that led
President Hosni Mubarak to resign on Feb. 11. [ID:nLDE72E25W]
 The outflow peaked at $3.21 billion in March but since then
has gradually slowed. Reserves reached an all-time high of $36
billion immediately before the uprising erupted in January.
 Economists say the central bank has been drawing on
reserves to support the value of the Egyptian pound, which has
lost only 2.3 percent of its value against the dollar since the
uprising despite a collapse of tourism and foreign investment,
two of the country's main sources of foreign exchange.
 Egypt said its economy contracted in first the six months
of 2011 and was likely to grow 3.2 percent in the 2011/12
financial year that began on July 1.
 (Reporting by Patrick Werr and Dina Zayed; Editing by Steve
Orlofsky)

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