Ahmed Kamel – Egypt Daily News
Egypt attracted $1.78 billion in foreign inflows into government debt instruments over just two trading sessions, signaling renewed investor confidence and strengthening the Egyptian pound against the US dollar.
The inflows, equivalent to approximately EGP 94 billion, were directed into government securities through the secondary market, contributing to a broad decline in the dollar across the banking sector.
Foreign Investors Return to Egypt’s Debt Market
Net foreign purchases of Egyptian government debt reached EGP 12.35 billion during last week’s trading, highlighting a strong return of foreign investors to the market.
Banking expert Hany Aboul Fotouh said the inflows reflect improving investor sentiment amid easing geopolitical tensions. He noted that expectations of de-escalation in regional conflicts have encouraged investors to re-enter emerging markets, including Egypt.
Improved Market Conditions Support Confidence
Aboul Fotouh pointed to several factors behind the renewed inflows, including a more flexible exchange rate, ease of capital movement, and lower perceived risk compared to previous crises.
He added that recent capital outflows were limited in scale, allowing the market to stabilize more quickly.
Egypt’s Risk Indicators Decline
Egypt’s sovereign risk profile also improved, with five-year credit default swaps falling by 74 basis points to 3.35 percent, marking their lowest level since early March.
Market analyst Ihab Said said Tuesday recorded the largest foreign purchases since late February, reinforcing the positive trend. He added that the improvement coincided with a weaker global dollar and relatively stable oil prices.
Dollar Weakens Across Banks
The US dollar declined by between 46 and 51 piastres across 10 banks by Wednesday’s close.
At major state-owned banks, the exchange rate dropped to EGP 51.97 for buying and EGP 52.07 for selling, a decline of around 50 piastres compared to the previous trading session.
The return of foreign inflows provides short-term support for Egypt’s currency and financial markets, signaling improving confidence among international investors. However, these flows remain highly sensitive to global economic conditions, making continued stability essential for sustaining momentum.
