Foreign investments in T-bills reach $14.895B by end of March

CAIRO – 21 May 2018: Foreign investments in treasury bills (T-bills) jumped by about $650 million, recording $14.895 billion by the end of March, compared to $14.245 billion by the end of February, according to data from the Central Bank of Egypt (CBE).

Foreign investment in T-bills witnessed a decline for nine consecutive months from April to December as a result of foreign investors’ outflows from emerging markets in light of international incidents. Foreign investments in T-bills dropped $10.82 billion during these nine months after hitting its highest levels at $21.553 billion in March.

The outflows of foreign investments in T-bills reached around $9.8 billion during the period of April to October 2018, as the investments hit LE 380.3 billion ($21.5 billion) in March.

This downtrend came on surface as a result of the crisis of emerging markets that started in April and caused a lack of trust between traders and the interest rates in these markets.

Emerging markets were affected by an exit wave of foreign investments in government debt instruments during the second quarter of 2018 as the US dollar rose, raising fears from the economies of these markets, especially after the crises of Turkey and Argentina.

CBE announced earlier that net foreign investments in government debt instruments jumped 21.6 percent in January, recording LE 233.8 billion, compared to LE 192.2 billion in December.

In February, Finance Minister Mohamed Ma’it and Vice Minister of Finance Ahmed Kojak announced during a press conference that foreign investments in Egyptian treasuries stood at $13.1 billion by end-January, clarifying that the inflows during January recorded of $900 million.

Previously, the Ministry of Finance announced financial treatments on treasury bills and bonds. Finance Minister Ma’it revealed the reason behind the financial treatments of T-bills’ taxes, saying that it’s one of the rights of the treasury. Ma’it noted the share of the treasury from the taxes wasn’t collected before.

For the current fiscal year, the budget deficit is estimated to record LE 438.59 billion, or 8.4 percent, planned by the ministry to be financed through treasury bills and bonds and through international and Arab loans.