The World Gold Council recently announced that Egypt became the world's largest buyer of gold in the first quarter of this year. During this period, the Bank of Egypt bought 44 tonnes of gold, accounting for more than half of global gold purchases in the first quarter of this year.
According to the World Gold Council, the Central Bank of Egypt's latest purchase of 44 tonnes of gold has increased the country's gold reserves by 54 to 125 tonnes, or about 17 per cent of the Central Bank of Egypt's total reserves.
Ahmed Hatab, head of Egypt's Feber Development and Business Consulting Firm: Egypt's decision to buy 44 tonnes of gold is a positive move in case of a prolonged crisis due to the Russian-Ukrainian conflict or the contraction of the US economy, as well as further EU sanctions on Russia, so Egypt has to act quickly, and by increasing gold reserves, we can also support the continued strengthening of the Egyptian pound.
However, there are also some insiders who hold a different view, arguing that in the event of global inflation caused by supply chain disruptions, etc., the Central Bank of Egypt should increase its reserves of the US dollar to ensure that foreign exchange funds are paid for imports of basic goods and necessities. Some analysts also said that since the outbreak of the Russian-Ukrainian conflict, the current gold price has peaked, and there is a possibility of a decline in the future. The Central Bank of Egypt did not disclose specific reasons for buying gold, but the Bank of Egypt has maintained a strategy of diversifying its portfolio. As of the end of April, the central bank of Egypt had foreign exchange reserves of about $37.1 billion, or about 249.7 billion yuan, an increase of $41 million from the end of March. Affected by the combined impact of the COVID-19 pandemic and the situation in Russia and Ukraine, Egypt's foreign exchange reserves fell by $3.9 billion in March.