Foreign Investments in Egypt's Debt Instruments Rise to $41.3 Billion

Foreign investment in Egyptian treasury bills and bonds rose to $41.3 billion at the end of December 2024, compared to $39.3 billion at the end of June 2024, according to data from the Egyptian Ministry of Finance.

The ministry stated in its semi-annual report on the financial performance of the Egyptian budget for 2024-2025 that the value of foreign investment in long-term treasury bonds reached $8.3 billion at the end of 2024, compared to $1.6 billion in June 2024.

The report attributed the increase in foreign investment, particularly in long-term treasury bonds, to confidence in the Egyptian economy.

According to data from the Ministry of Finance, the average return on treasury bills and bonds rose to 27.7% during the first half of the current fiscal year (2024/25), compared to the 25% the ministry expects for the entire current fiscal year.

The Egyptian government's revenue from taxes on treasury bills and bonds jumped to EGP 154.7 billion during the first half of the current fiscal year, compared to EGP 87.29 billion during the same period in the previous fiscal year (2023/24).

This increase reflects the Egyptian government's expansion in issuing debt instruments during this period, with higher returns on these instruments.

During the first half of the current fiscal year, returns on Egyptian instruments reached high levels. The Egyptian government raised the returns in hopes of encouraging foreign investors to maintain the flow of dollar resources and finance the Egyptian budget deficit.

With Egypt's inflation rate declining to 12.8% in February 2025, Egypt now offers a high real return on government debt instruments. The real return is the interest rate an investor receives or expects to receive after accounting for inflation.

Data indicates that the average yield on Treasury bonds decreased by 2.33% between December 3, 2024, and January 28, 2025, to 22.57%, down from 24.90%.

The average yield on Treasury bills also decreased by 2.8% between December 17, 2024, and January 14, 2025, to 26.65%, down from 29.48%.

Treasury bills and bonds are financial instruments issued by the Central Bank of Egypt, on behalf of the Egyptian Ministry of Finance, on a weekly basis, to help the government finance the general budget deficit.