Sovereign Analysis / Global

Egypt: Carry trade alive and well once again

  • Egypt now has among the highest real interest rates in the world, ranging from c7-8.5% across the sovereign bond curve
  • Foreign holdings of T-bills fell by US$13bn from February to May, but picked back up with US$3bn of inflows this month
  • EGP overvaluation is the main risk, but ample reserves and external funding sources will promote FX stability
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