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Foreigners Pour Billions into Egyptian T-bills despite Regional Tensions

Taarek Refaat Foreign investors injected approximately 12 billion Egyptian pounds into treasury bills on Wednesday, defying market expectations amid ongoing geopolitical tensions between Israel and Iran. The surge in foreign demand signals renewed confidence in Egypt's economic stability, even as the broader region faces uncertainty. The sharp influx of foreign capital came as a surprise to market observers following heavy foreign sales on Monday and Tuesday, which amounted to 6 billion and 23 billion pounds, respectively. On Wednesday alone, foreigners purchased over 16.2 billion pounds in Egyptian treasury bills, while selling just 4.6 billion pounds. Mahmoud Nagla, Executive Director of Money Markets and Fixed Income at Al Ahly Financial Investment Management, said the uptick in foreign trading of short-term government debt reflects opportunistic strategies by investors seeking quick, secure returns in a volatile environment. 'These aren't exits,' Nagla explained to Al Arabiya Business. 'Foreign investors are actively rotating positions to lock in gains based on interest rate and exchange rate movements.' He added that the relative de-escalation between Iran and Israel—without direct involvement from new parties—has helped calm investor concerns about spillover effects on Egypt's economy. However, he cautioned that broader regional escalation remains a risk. Currency and Risk Sentiment Remain Resilient The Egyptian pound has depreciated by roughly 2% against the U.S. dollar since the latest regional conflict erupted, with the dollar now trading around 50.8 pounds. Despite the modest decline in the local currency, Egypt's five-year credit default swaps (CDS) — a key measure of sovereign risk — have remained stable near 520 basis points, their lowest since February. 'This reflects improving investor confidence,' Nagla noted, attributing the stability in Egypt's sovereign risk profile to several factors: the disbursement of the final tranche of the International Monetary Fund loan, gradual interest rate cuts by the central bank, and continued implementation of structural economic reforms. Cautious Optimism Amid Uncertainty While short-term foreign trading is expected to continue in the secondary market, volumes may remain modest, dependent on currency and interest rate dynamics. Analysts warn that should the regional conflict intensify or expand, Egypt could still face indirect economic pressures, including on tourism, trade, and external financing. Nevertheless, for now, Egypt appears to be reaping the benefits of macroeconomic stabilization efforts and disciplined fiscal reforms, which have helped reassure investors during a period of heightened regional volatility. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War Arts & Culture Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies News Flights suspended at Port Sudan Airport after Drone Attacks Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream News Shell Unveils Cost-Cutting, LNG Growth Plan Technology 50-Year Soviet Spacecraft 'Kosmos 482' Crashes into Indian Ocean News 3 Killed in Shooting Attack in Thailand