Egypt investors bold enough to look for dollars themselves

Foreign holders of Egypt’s local debt have been using the open currency market more frequently to get dollars. Not only is it a sign they’re more comfortable getting cash out of the country, but it also means the days of a stagnant Egyptian pound may be numbered. Bondholders traded hundreds of millions of dollars on the interbank market in the first five weeks of 2018, according to people familiar with the matter. About 20 percent to 30 percent of debt-related foreign currency trades are going through the open market, the people said, asking not to be named because they aren’t allowed to speak publicly. The rest are still funneled through a central bank mechanism that guarantees investors can take money out of the country for a fee.

It’s a marked shift for a country where a crippling dollar shortage had made it near impossible for foreign investors to repatriate profits. The crisis prompted policymakers to float the currency and lift most restrictions in late 2016, but it has taken months for investors to build enough confidence to forgo their money-back guarantee.