Ahmed Kamel – Egypt Daily News
Foreign investors’ holdings of Egyptian treasury bills rose to a record $55.1 billion by the end of June 2026, marking a powerful return of international capital to the country’s domestic debt market after a period of heightened geopolitical uncertainty.
Data from the Central Bank of Egypt showed that foreign investments in treasury bills increased by approximately 52.7 percent during the second quarter of the year. The rise represented an increase of nearly $19 billion compared with the end of March, when foreign holdings had fallen sharply amid concerns linked to regional tensions and the broader international economic environment.
The latest figure exceeded previous records for foreign investment in Egyptian treasury bills. It also reversed a significant withdrawal that had taken place during the first two months of the geopolitical crisis involving the United States and Iran. During that period, foreign investors reduced their holdings by approximately $15.8 billion, bringing the total down to about $36.04 billion at the end of March.
The strong recovery during the second quarter indicates that international investors once again viewed Egyptian debt instruments as an attractive destination for short-term capital. Treasury bills are particularly sensitive to changes in investor confidence because they can be bought and sold relatively quickly, allowing portfolio investors to respond rapidly to developments in currency markets, interest rates and geopolitical conditions.
The return of foreign capital was accompanied by substantial activity in Egypt’s secondary treasury bill market. Foreign and Arab investors recorded combined net purchases of approximately 438 billion Egyptian pounds in June, equivalent to around $8.9 billion based on the exchange rate used in the reported data.
Foreign investors accounted for the majority of those purchases, with net buying estimated at 362.2 billion pounds. Arab investors recorded net purchases of approximately 76 billion pounds. The figures suggest that June was particularly strong for foreign participation in local debt markets and that investors were willing to increase their exposure after the earlier wave of withdrawals.
Several factors contributed to the renewed inflows. A reduction in geopolitical tensions and the announcement of understandings aimed at easing the confrontation between the United States and Iran helped reduce immediate concerns about regional stability. Investors also became less worried about potential disruptions to energy supplies and shipping routes, both of which are important to Egypt’s economy and foreign-currency earnings.
The Egyptian pound also performed better against the dollar during June after coming under pressure at the beginning of the regional escalation. The improvement in the currency supported investor confidence and reduced some of the risks associated with holding pound-denominated securities.
Egypt’s foreign-exchange position benefited from the renewed capital inflows. International reserves rose to record levels during the period, supported by higher foreign-currency assets, portfolio investment and other financing sources. A stronger reserve position can help the central bank meet external obligations, support imports and reassure investors about the country’s ability to manage short-term pressures.
Egypt has relied heavily on domestic and foreign financing to support public spending and manage budgetary pressures. The country’s high interest rates have helped make its treasury bills attractive to international investors seeking strong returns, although those returns come with significant exposure to currency movements, inflation and changes in economic policy. Earlier assessments of Egypt’s economy highlighted the effects of high debt-servicing costs, foreign-currency shortages and the need for continued external financing.
Despite the record inflows, analysts are likely to treat the latest increase with caution. Portfolio investments are generally more volatile than foreign direct investment because they can leave a market quickly when international conditions change. A new rise in geopolitical tensions, an increase in global interest rates or a decline in the relative return offered by Egyptian debt could encourage investors to reduce their positions again.
The stability of the exchange rate will also remain an important consideration. Foreign investors measure their returns not only by the interest paid on treasury bills but also by the value of the currency in which those returns are received. A sharp decline in the Egyptian pound could reduce the dollar value of investment gains, even when local interest rates remain high.
The central bank’s monetary policy will therefore play a key role in maintaining investor interest. Decisions affecting interest rates, liquidity and exchange-rate management could influence whether foreign capital continues to enter the treasury bill market or begins to move elsewhere.
For the Egyptian government, the return of foreign investors provides immediate benefits. It increases demand for public debt, supports foreign-currency liquidity and can help finance the budget. However, it also increases the importance of maintaining investor confidence and limiting the risks associated with sudden capital outflows.
The record $55.1 billion figure represents a major improvement from the level recorded at the end of March. It demonstrates how quickly international capital can return when market conditions improve, but it also highlights the temporary nature of many portfolio flows. Sustaining the recovery will depend on continued currency stability, attractive yields, stronger foreign-exchange reserves and a calmer regional environment.
