Egypt’s balance of payments will get short-term relief

Significance These flows have been supplemented by a resurgence of portfolio investment in high-yielding government securities, while remittances are now flowing via the banking system rather than the parallel market. This has boosted foreign exchange reserves and turned a large net foreign asset deficit into a surplus. Impacts The resolution of the foreign exchange crisis will help stabilise the currency and gradually bring down inflation. The government will likely pay arrears to international oil companies, which would encourage them to invest in natural gas production. Shipping through the Red Sea and the Bab al-Mandab strait is unlikely to resume in the short term.