Egypt's debt instrument market receives $970 mln in investments since early January: CBE

Doaa A.Moneim , Tuesday 18 Jan 2022

Foreign investors have pumped $970 million since early January in investments in Egypt’s long-term treasury bills (T-bills), an official source at the Central Bank of Egypt (CBE) said on Tuesday.


These investments in Egypt’s debt instruments reflect the robust rebound of foreign investments in the Egyptian market in 2022, according to the source.

He also noted that Egypt’s economy has proven its ability to overcome the global monetary policy repercussions, which is positive aspect.

In July, the International Monetary Fund (IMF) expected the foreign direct investment (FDI) inflows to jump in Egypt by 60 percent over the coming four years –starting from current FY2021/2022.

Accordingly, FDI inflows to Egypt are projected to hit $8.6 billion during current FY2021/22, which ends in June, up from $5.4 billion recorded in FY2020/21, said IMF.

It also predicted FDI inflows to Egypt to continue its upturn in FY2022/23 to post $11.7 billion before hitting $16.5 billion in FY2024/25.

Egypt’s government, through the Ministry of Finance, adopts a medium-term debt management strategy that centers on reducing debt services, prolonging its period, and improving governmental security in markets to expand the investors' base that will, in turn, provide the required liquidity to support the budget.

According to this strategy, the external debt trajectory will be set in accordance with the expected cash inflows to the country to a maximum of 37 percent of GDP, which will be put on a downturn path per year.

It also targets decreasing external debt to GDP ratio to below 30 percent over the medium term.

Moreover, the strategy aims at decreasing public debt to GDP ratio to about 70 percent over the coming four years and putting a cap on loans obtained through external bodies over the same period.

Additionally, the strategy includes settling a portion of debts through exchanging them with unique state-owned assets. The aim is to reduce public debt by EGP 100 billion annually for the coming four years.

During January, CBE said that Egypt’s external debt declined in September — the end of the first quarter (1Q) of the current FY2021/2022 — to record $137.4 billion, down from the $137.8 billion posted by the end of June — the end of FY2020/2021.

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