Is it still preferred?
This is a reflection of the wealth of a currency that has been a favorite of emerging market investors.
In 2016, the government approved a $12 billion International Monetary Fund program and devalued the currency, adhering to measures that affected its attractiveness to foreign investors. Given the high interest rates in Egypt, the stability of poundWith its track record of market-friendly moves, foreigners have poured billions of dollars into its debt market.
But price pressures have now pushed the country’s inflation-weighted rates below zero, with central banks elsewhere around the world tightening monetary policy. The government said in May that foreign investors had withdrawn about $20 billion from the domestic debt market so far this year.
International brands are the first victims of careful dealing with the pound in the Egyptian market
The Central Bank of Egypt deviated from most expectations in June to keep the benchmark interest rate unchanged, after it approved the largest increase in nearly half a decade the previous month.
Domestic bonds have lost about 2% this month, making them the worst performers in emerging markets, according to Bloomberg Indexes. Foreign demand has not returned yet, with bond auction results still weak.
“Continuing the tightening cycle will renew investor interest in the domestic market and could ease some exchange rate pressures,” Anna Friedman and Christian Witowska of Deutsche Bank Research said in a report. pound instead of a sharp devaluation of the exchange rate.”
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