Wednesday, November 28, 2018
Books – Mustafa Eid:
Design by Michael Adela:
Central bank data show that T-bills lost $ 9.8 billion in foreign investment in seven months from the beginning of April to the end of October.
According to the monthly central bank report for November, foreign investments in treasury bills amounted to about 210.2 billion pounds (11.7 billion dollars) at the end of October, compared with 380.3 billion pounds ($ 21.5 billion) at the end of March.
These investments fell only in October to about $ 1.4 billion, continuing their decline for the seventh consecutive month.
In line with the reduction in foreign investments, the National Bank's investments in treasury bills significantly increased from the beginning of April to the end of October, reaching 115.5 billion pounds, reaching 166.5 billion pounds at the end of October, compared with 51 billion pounds March.
Investments of public banks in treasury bills rose by 7 months to 53.4 billion LE and reached 386.3 billion pounds at the end of October, compared with 333 billion pounds in late March.
Private sector investment in the period from the beginning of April to the end of October increased by 22.7 billion pounds and reached 302.4 billion pounds, compared to 279.8 billion pounds at the end of March.
Existing treasury bills at the end of October amounted to 1316.1 billion pounds, compared with 1211.9 billion pounds in late March, an increase of 104.1 billion pounds.
Deputy Foreign Minister Ahmed Kayak said in a statement released last month that foreign investments in debt instruments at the end of September amounted to $ 14 billion, compared with $ 17.5 billion at the end of June and $ 23.1 billion at the end of March 2018, Data from the Ministry of Finance.
In emerging markets, the wave of foreigners' emergence from investment in debt instruments has been hit, starting in April last year, while the US dollar has slowed and grew fear of the economies of these markets, especially after the crisis in Turkey and Argentina.
"The crisis that hit developing markets and which has led foreign investors to extract investments was repression of the government," Finance Minister Mohammed Mait said in an interview with Bloomberg Television.
He said the crisis and rising interest rates and oil globally and the emergence of liquidity from the Egyptian market shocked the Egyptian economy and the public budget.
"However, I think that what we were doing during the current year was good because we managed to overcome all this and skip and finish our goals," the finance minister said.
"I think the Egyptian economy has managed to deal with all of this headache and what happened with emerging markets," he said.
Some of these markets have had a tendency to raise interest rates after experiencing crises in relation to their economies in line with this exit. Argentina has increased key interest rates from 45% to 60%, and Turkey from 17.75% to 24%.
While the Central Bank of Egypt set the interest rate for the fifth time in a row at a meeting of the Monetary Policy Committee on November 15 last year, with 16.75% for the deposit and 17.75% for lending.
In the recent period, yields on treasury bills in Egypt vary from 19% to 20%.
The following illustration shows how foreign investments in treasury emissions have developed over the past months.