Egypt's Central Bank cites macro gains and mandates ESG risk systems for banks

The Central Bank of Egypt (CBE) released data showing that Egypt’s external debt rose 5.6% to US$163.9 billion in December 2025, but the debt‑to‑GDP ratio fell to 40.3%, indicating improved debt sustainability as the economy expanded faster than its liabilities. Foreign‑currency inflows strengthened, with workers’ remittances up 40.5% to US$41.5 billion and tourism and Suez Canal receipts recovering, narrowing the current‑account deficit by 13.6% to US$9.5 billion in the first half of FY 2025/26. Banking sector liquidity improved sharply, with net foreign assets turning from a US$6.4 billion deficit to a US$12.2 billion surplus, and international reserves rising to over US$53 billion by May 2024.

In a related move, the CBE ordered all domestic banks to implement an Environmental and Social Risk Management System (ESRMS) by January 2028. The directive requires banks to embed ESG considerations into credit and investment decisions, appoint a Head of Sustainability, and submit regular implementation reports, aligning the sector with international climate‑risk standards.

Together, the macro‑economic improvements and new sustainability mandates aim to reinforce Egypt’s financial stability and attract further investment.