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Foreign investment in Egypt's debt instruments hits record high

Foreign investment in Egypt's debt instruments hits record high
Foreign holdings of the country’s treasury bills and bonds amounted to $28.5 billion

Cairo – Mubasher: Foreign investment in Egyptian debt instruments recorded a new record high, reversing the outflows in 2020 which were triggered by the coronavirus (COVID-19) pandemic, Bloomberg reported on Tuesday, citing the Head of the Finance Ministry’s debt management unit, Mohamed Hegazy, as saying.

At the end of February, foreign holdings of the country’s treasury bills and bonds amounted to $28.5 billion, Hegazy told the international news agency.

The surge in foreign investments was driven by the North African nation’s high real-interest rate, which ranked second among 50 major economies tracked by Bloomberg following Vietnam, in addition to returns of 1.7% since the end of December 2020, compared to an average decrease of 2.7% across emerging markets.

Since the flotation of the Egyptian pound as part of an economic reform programme in 2016, foreigners have injected billions of dollars into the country’s debt instruments.

In Spring 2020, foreign outflows reached about $17.5 billion due to the pandemic.

The proportion of bonds’ net issuance grew to 110% of local offerings by the end of February, surpassing the target of 80% by June, Hegazy added.

Egypt plans to cut borrowing costs by extending the average maturity of its debt, he added, noting that new debt instruments issued this year could attract more investors and lower borrowing costs.