Egypt confident $23 billion in debt inflows won’t flow out

Egypt’s finance minister said he’s confident the $23 billion that foreigners invested in Egyptian Treasury bills will stay in the country, thanks to its improved credit profile and rising global liquidity. The trade-off between risks and returns remains attractive, and investments have been rising in “recent weeks and months,” Amr al-Garhy said in an interview with Bloomberg TV. Credit rating companies, which haven’t significantly upgraded Egypt’s junk rating in the past two years, should give Egypt a “better look,” Garhy said.

Rising global interest rates, coupled with lower yields inside Egypt, have fueled concerns about the nation’s ability to continue to attract money from abroad. The funds played a key role in bridging the gap in Egypt’s finances with the outside world and have helped boost its foreign reserves to record levels.

Garhy said the level of foreign investments in Egypt’s high-yielding local currency debt is “manageable” and below historical 2010 highs equivalent to almost $30 billion in today’s terms.

The Egyptian economy reappeared on foreign investors’ radar after the government embarked on an economic overhaul plan in November 2016 that included floating the currency and slashing subsidies.