(Bloomberg) -- Egypt’s net international reserves surged to their highest level in about two years following a landmark investment deal with the United Arab Emirates.

The figure rose to $40.4 billion at the end of March from $35.3 billion a month before, the central bank said Wednesday in a statement. It’s the largest reserve amount since February 2022, according to data compiled by Bloomberg.

The dramatic rise highlights a turnaround in the North African country fortunes after a grinding economic crisis and a chronic shortage of foreign exchange. That all changed in late February when the UAE inked a $35 billion deal with Egypt — the biggest inward investment in the country’s history. 

Read More: The UAE’s $35 Billion Investment in Egypt Is a Geopolitical Flex

The first cash transfers from the pact paved the way for a long-awaited currency flotation that in turn secured an $8 billion expanded International Monetary Fund program. In total, global lenders and neighbors have pledged more than $50 billion in investments, loans and grants to shore up the Middle East’s most populous nation as the Israel-Hamas war in Gaza piled yet more pressure on the economy.

In recent weeks, investors enticed by high yields and a cheaper pound have piled into Egypt’s local bonds at a record pace. The reserves figure may see another increase in April with further inflows expected, including more from the UAE pact and two tranches of the IMF loan worth a total $820 million.

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Under the UAE deal, Abu Dhabi wealth fund ADQ bought development rights to a premium area on Egypt’s Mediterranean coast known as Ras El-Hekma for $24 billion and said it would invest $11 billion of the UAE’s money already deposited at Egypt’s central bank in additional real estate and other prime projects in the country.

The IMF said in a statement Friday the UAE’s funding “has alleviated near-term balance of payment pressures and, if used judiciously, will help Egypt rebuild buffers to deal with future shocks.” 

Read More: Egypt’s $50 Billion Rescue Betrays Depth of Its Economic Crisis

Egypt is now working on clearing a backlog of demands for foreign exchange and has begun repaying arrears due to foreign oil-companies operating in the country.

“The authorities’ commitment to use a large part of the new financing from the Ras El-Hekma deal to improve the level of reserves, fast-track the clearance of foreign currency backlogs and arrears, and reduce government debt upfront is prudent,” the IMF said.

--With assistance from Tarek El-Tablawy.

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