Cairo – Mubasher: Egyptian debt instruments have become so attractive to foreign investors following a group of economic reforms performed by the government of the North African country, Bloomberg said.
The Central Bank of Egypt’s (CBE) single cut of interest rates in 2019, along with the patience policy adopted by the Fed and the other global central banks boosted the Egyptian bound, hitting its highest level against the USD in more than two years.
Foreign holdings of Egyptian debt instruments soared 40% in April, as per Bloomberg’s data.
The Egyptian pound’s exchange rate against the USD increased by 5.83%, or EGP 1.042, year-to-date at the CBE.
Yesterday, the Monetary Policy Committee (MPC) of the CBE decided to maintain the current interest rates unchanged.
“Egypt will remain attractive for investors compared to other emerging markets because its interest rate should remain relatively high, its currency position is good, and the country’s risk profile is low,” head of macroeconomic analysis at EFG Hermes Mohamed Abu Basha told Bloomberg.
Egypt’s bills have some of the biggest returns among developing nations, with a 17% yield for one-year T-bills.
"Given expectations that monetary easing could resume toward the end of the year at the earliest, followed by a possible depreciation in the pound, some investors might adopt a wait-and-see approach,” Bloomberg reported, citing independent economist Reham El Desoki as saying.
