Arab Finance: The National Bank of Kuwait’s (NBK) Economic Research Department expects Egypt’s foreign exchange (FX) reserves to reach $45-46 billion by the end of May after receiving the second tranche of the Ras El-Hekma deal, as per NBK’s Daily Economic Update.

The department also anticipated the government to use these funds to close the remaining deficit in the net foreign assets of the banking system, which hit $4.2 billion as of March.

Additionally, the research note showed that the CBE would give priority to clearing the remaining import backlog worth $3 billion and international oil companies’ dues worth $5 billion.

NBK also forecast that the remaining $6 billion tranche could be directed toward further bolstering FX reserves.

The lender added that the influx of funds could prompt a slight appreciation in the EGP against the USD.

However, over the longer term, expectations lean towards the pound softening as import activity increases and growth normalizes.

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