Foreign investments in Egypt’s treasury bills surges by 140% in March: CBE

Cairo – June 13, 2024: Egypt’s treasury bills and local debt have been receiving more interest from foreign investors, with the Central Bank of Egypt’s (CBE) latest data revealing that foreign investments in local treasury bills surged in March by around 140 percent.

According to the CBE, March 2024 recorded foreign purchases of local T-bills at $32.7 billion, compared to $13.6 billion recorded in February.

In a separate release, the CBE revealed that the repayment of foreign debts worth $7.384 billion during the Q2 of 2023, compared to $8.168 billion at Q1 of 2023. Repayments were divided into $2.249 billion in interest paid, in addition to $5.135 billion in installments paid.

In general, foreign interest in Egypt’s debt have increased since the CBE’s decision to float the Egyptian pound and increase interest rates after the Ras El Hekma deal with the UAE, according to a recent piece by Financial Times.

Financial Times revealed that investors injected $15 billion into Egyptian local bonds in 2024, most of which were poured following the announcement of Ras El-Hekma deal.

Despite increased investor interest, foreign holdings of local debt in the region remain relatively low, indicating room for further growth. In Egypt, foreign investors hold around one-tenth of local debt, suggesting potential for increased inflows, explained FT.

However, the outlook for emerging market local debt could be challenged by prolonged high US interest rates, particularly for countries like Egypt, Nigeria, and Pakistan, which face substantial debt interest payments in the coming years.

Official local figures that net foreign direct investment flows in Egypt amounted to about $10 billion during the last fiscal year FY2022/2023.