Egypt Got $40 Billion in Investments, Transfers Since Float

CAIRO (Capital Markets in Africa) – Egypt has received $40 billion in investments and transfers from abroad since floating its currency in November and securing the largest International Monetary Fund loan to a Middle East nation.

The funds include receipts from exports, investors selling dollars to buy Egyptian assets, and the exchange of dollars for Egyptian pounds, either on the local market or through remittances, central bank sub-governor Rami Aboul Naga said on Thursday. The figure does not include financing Egypt has received, such as IMF loan tranches or $7 billion in Eurobonds Egypt sold this year.

Investors have poured money into Egyptian debt and equities since authorities started overhauling the economy by removing most currency restrictions, raising interest rates and cutting fuel subsidies. Foreign reserves surged to more than $36 billion in July, a record, with the debt market attracting over $15 billion in foreign inflows.

The majority of Egyptians, however, have yet to feel the economic tides turning, with inflation surging to above 33 percent in July due to the weaker currency, higher taxes and the subsidy cuts. About half of Egypt’s 93 million people live below or near the poverty line.

Other areas have been more positive. The budget deficit hit the lowest level in five years in the 12 months ended June. Stocks have surged nearly 60 percent in local currency terms, and the government expects foreign direct investments to exceed $10 billion this fiscal year.