Cairo: Foreign investors’ holdings of Egyptian Treasury bills have almost tripled since January, further bolstering the government’s case for floating the currency late last year.
Overseas holdings of T-bills reached 60.8 billion Egyptian pounds (Dh12.4 billion, $3.3 billion) as of March 14, Samy Khallaf, head of public debt at the Finance Ministry, said in an interview. That compares with 22 billion pounds at the end of January. Foreign investors also bought 3.8 billion pounds of 6-month and 12-month notes in a finance ministry auction on Thursday, he said.
Confidence is growing in Egypt’s economy after the government removed restrictions on the pound exchange rate and secured a $12 billion loan from the International Monetary Fund in November. Even so, the level is still far below the $10 billion of foreign investors’ holdings before the 2011 uprising that ousted long-time ruler Hosni Mubarak and ushered years of economic and political instability.
Egypt sold 11.5 billion pounds of T-bills in Thursday’s auction, attracting 27.8 billion pounds in bids. Yields on 6-month notes rose by 73 basis points to 19.39 per cent and by 69 points on 12-month notes to 19.24 per cent, Khallaf said in a text message.
While the pound float has benefited Egyptian stocks and bonds, it has also helped to drive inflation above 30 per cent in February.