Demand for Egyptian debt surges after $55bn bailout and investment package

Demand for Egyptian debt surges after $55bn bailout and investment package

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

International investors have rushed into Egypt’s debt after the most populous Arab nation secured a $55bn bailout and Gulf investment package to reboot its troubled economy and prevent it succumbing to fallout from the war in Gaza.

Demand for short-term bonds issued by Egypt at double-digit interest rates has surged since last month’s financial rescue, and a large devaluation in Egypt’s pound, staved off a debt crisis that only weeks ago loomed over the country.

Investors bid $21bn for $2.4bn in one-year Treasury bills on offer from the Egyptian government over the past month — it sold $8.5bn — in a return of the “hot money” flows that had shunned the country as too risky only a few weeks ago. Yield on the bills fell from 32 per cent to 26 per cent.

“Everybody wants a piece of Egypt now. It’s quite a change from just a few weeks ago,” said Farouk Soussa, Middle East and north Africa economist at Goldman Sachs.

President Abdel Fattah al-Sisi’s government came under mounting pressure during the past year, as the IMF and Cairo’s traditional Gulf partners refused to step in to again save an