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Egypt.. Falling Egyptian pound tempts the business class

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Emerging market investors are poised to return to Egypt’s domestic debt market, lured by a cheaper pound and record yields compared to their peers.

The network said in a report that Egypt’s move to a more flexible exchange rate has led to a resurgence of interest in its local currency debt, which recorded the worst performance in emerging markets last year, according to Bloomberg indexes. This comes after investors pulled $22 billion out of the market over a six-month period in 2022, according to Finance Minister Mohamed Maite.

He said that almost all Egyptian treasury bills are showing the highest interest rate ever compared to developing country debt, with the yield gap widening with other developing countries to the highest level recorded this week.

Attracting foreign investors to the local debt market is critical for the Arab world’s most populous country, which has been absent from foreign capital markets for almost a year, according to the network.

The pound fell to a record low of 32.1 against the dollar this month amid a foreign exchange shortage crisis. But some will still want the currency to find a balance before increasing risk.

Source: Masravi

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