Foreign investments in Egypt’s debt instruments increased to $26 billion as the market started to recover from the coronavirus (COVID-19) crisis, Finance Minister Mohamed Maait told Al Arabiya and CNBC in separate interviews on Sunday.
This is up from $23 billion at the end of November and is less than $2 billion shy of the $27.8 billion seen in February before the huge COVID-inspired sell-off that swept emerging markets.
Egyptian assets were hammered by the COVID-19 sell-off in the spring. Investors sold more than 60 percent of their holdings of Egyptian bills and bonds between March and May as capital fled emerging markets in response to the escalating pandemic. Over the three months foreign holdings fell from almost $28 billion to just $10.4 billion.
However, holdings more than doubled in the following five months to hit $21.1 billion by mid-October. It was part of a reversal of flows that the minister described yesterday as a “very big shift.”
Egypt’s economy is now expected to expand between 2.8 and 4 percent this financial year under the Finance Ministry’s amended targets, while the debt-to-GDP ratio is penciled in at 89 percent rather than 83 percent, Maait said.
The growth upgrade compares with the most recent expectation of 2.8-3.5 percent and comes after the release of 1H2020 fiscal data.