A bank official has revealed that international financial institutions and funds have injected new investments estimated at about $3bn into the Egyptian market last month.
Nearly $1bn of the new investments has been provided in the last two days alone.
“The Egyptian market attracted about $592m in new investments from international funds and portfolios last Thursday alone, which is the highest daily level since the novel coronavirus pandemic started, while on Sunday it received about $367m,” the Middle East News Agency (MENA) quoted the source.
He noted that the increase of foreign investment in the Egyptian market reflects the international confidence in the country’s economic and monetary policies.
In the recent period, Egypt has received an estimated $10bn in cash flows from the International Monetary Fund (IMF) and the international market.
Of this amount, $4.8bn has come from the IMF, with Egypt receiving a $2.8bn tranche under the rapid financing instrument (RFI) package, and $2bn as the first tranche of a $5.2bn credit line. This is in addition to $5bn in proceeds from bonds.
Economists note that international investors have become increasingly confident in the Egyptian economy. They expect that cash inflows from international investors will reflect positively on the local exchange market and enhance the strength of the local currency.
Moreover, the US dollar has depreciated against the Egyptian pound, losing 31 piasters in the past few weeks, recording EGP 15.91 to buy and EGP 15.99 to sell. The latest US dollar prices compare to the EGP 16.20 to buy and EGP 16.30 to sell that was recorded a month ago.
An IMF report released two days ago noted that Egypt has adopted a proactive approach to reducing the repercussions of the novel coronavirus pandemic. The report stressed that Egypt was one of the fastest-growing emerging markets before the emergence of the virus, where the country’s reform programme contributed to strengthening its economic solidity.
This has, in turn, led to a rise in the country’s cash reserves to a level that exceeds standard international sufficiency of reserves followed by international institutions. The IMF report, however, noted that the turmoil that has arisen off the back of the pandemic has affected the pace of Egypt’s economic reforms.