Egypt negotiates $5.4bn Saudi deposit renewal amid regional instability

Egypt is working to manage its macroeconomic stability amid regional conflicts, with the International Monetary Fund (IMF) noting that policy reforms have strengthened growth and helped rebuild international reserves. Despite initial shocks to the Egyptian pound and fluctuations in nonresident holdings of government debt, the economy has shown resilience, with growth reaching 5.0 percent in the third quarter of FY2025/26.

To maintain foreign currency reserves, the Egyptian government is engaged in high-level talks with Saudi authorities regarding a $5.434 billion Saudi deposit held at the Central Bank of Egypt. Due for repayment in October, discussions are focused on either renewing the deposit or converting it into direct investments. This move is intended to help Egypt mitigate rising shipping and import costs, as well as declining Suez Canal revenues resulting from regional instability in the Gulf and Bab al-Mandeb.