Mon, 06 Feb 2023

Egypt receives $925 million of foreign investment in one week

Robert Besser
20 Jan 2023, 23:42 GMT+10

CAIRO, Egypt: In a statement released this week, Egypt's central bank said that after the Egyptian pound sharply depreciated last week, foreign investors transferred more than $925 million dollars into the country's foreign exchange market over three days.

At the start of January 11, the Egyptian pound weakened to about 32 to the US dollar from 27.60 before rebounding to 29.61 pounds by January 16.

The central bank added that over the past three business days, additional foreign currency from local sources, remittances from Egyptians working abroad and tourism, also flowed into the market.

After the country reached an agreement with the IMF for a $3 billion financial support package in October, after Russia's invasion of Ukraine increased wheat and oil prices while dealing a blow to tourism from two of its largest markets, Egypt promised to shift to a "durably flexible" exchange rate.

Meanwhile, Egypt has been loosening its dollar peg in jumps, with a view to letting the currency float freely.

Meanwhile, the central bank stressed that over the past three days, banks were able to fulfill requests of more than $2 billion by Egyptian importers, in addition to the requests of other clients.

When the central bank restricted imports in February, goods began backing up in Egyptian ports, but last month the bank removed those restrictions, so importers began scouring for dollars for the release of their goods.

As investors continued to return after the pound's depreciation, sales of Egyptian treasury bills of one year or less surged at auctions from January 12 through 15.

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