Foreign investment in Egyptian debt hit a historic high, completely reversing outflows in 2020 spurred by the coronavirus pandemic, according to a senior Finance Ministry official.
Overseas holdings of the North African nation’s Treasury bills and bonds reached $28.5 billion at the end of February, Mohamed Hegazy, head of the Finance Ministry’s debt management unit, told Bloomberg in an interview.
The appetite is being fueled by Egypt’s high real-interest rate, which is second only to Vietnam among more than 50 major economies tracked by Bloomberg, as well as returns of 1.7 per cent since the end od December. That compares with an average 2.6 per cent decline across emerging markets, according to Bloomberg Barclays indexes.
Egypt is drumming up yet more interest, as it aims to have its local debt settled by Belgium-based Euroclear Bank SA from later this year, and says it’s met the requirements to list its notes on JPMorgan Chase & Co.’s Government Bond Index for emerging markets, which attracts investments from passive funds that track the gauge, the agency said.
The most populous Arab nation is also making progress with plans to reduce borrowing costs by extending the average maturity of its debt. The proportion of bonds’ net issuance increased to 110 per cent of domestic offerings by the end of February, exceeding the target of 80 per cent that the country wanted to reach by June, Hegazy noted.
“New debt instruments issued in 2021 could entice more investors and cut borrowing costs,” Hegazy said.
