Egypt Was The World's Biggest Gold Buyer in The First Quarter.

The impact of the Conflict between Russia and Ukraine is reverberating around the world. Russia and Ukraine, which get most of Egypt's food imports, have had their exports restricted and their economies have suffered. Egypt has recently gone on a gold buying spree to protect its economy.

Egypt bought the most gold worldwide in January-March 2022, ranking first in the world, the World Gold Council reported on May 11, media reported. Egypt's central bank bought 44 tonnes of gold during the period, accounting for more than half of all global gold purchases during the quarter.

Egypt's central bank is understood to have increased its gold reserves by 54 per cent, or about 17 per cent of its total, to 125 tonnes, by buying 44 tonnes.

Ahmed Khattab, head of Feber Development and business Consulting in Egypt: Egypt's decision to buy 44 tonnes of gold is a positive move in case there is a prolonged crisis due to the Conflict between Russia and Ukraine or the contraction of the US economy and further eu sanctions against Russia, so Egypt has to act quickly. By adding gold reserves, we can also support the continued strength of the Egyptian pound.

Egypt's central bank has maintained a diversified portfolio. In this way, Egypt can ensure that it has a steady stream of foreign exchange funds to pay for imports.

Food prices in Egypt have already skyrocketed. At the end of March, flour prices in Egypt briefly hit a record high. Egypt is highly dependent on food imports and is the world's leading wheat importer.

At the end of April, Egypt's central bank had foreign exchange reserves of about $37.1 billion, or 249.7 billion yuan, up $41 million from the end of March. Egypt's foreign exchange reserves fell by $3.9 billion in March due to the combined impact of the COVID-19 pandemic and the russia-Ukraine situation.

Egypt will import more than 70 percent of its wheat in 2021 from Russia and Ukraine, and the average price per ton of imported wheat is now about $100 higher than last year. Such a sharp rise in food prices has caused social unrest in Egypt. Inflation is reported to have risen to 10.5% in March, largely due to high food prices.

Now Egypt has so much gold, it's really prepared for a rainy day.