Another $1 billion in hot money exits in a day, dollar holds steady

Foreign investors kept up their heavy selling of treasury bills and bonds listed on the Egyptian Exchange on Wednesday, ending the day with net sales of more than $1 billion, according to trading data from the exchange.

The latest outflows underscore continued pressure on Egypt’s government debt market as investors pull back amid the escalating US-Israeli war against Iran, though the dollar exchange rate remained broadly stable and the government says it is working to secure enough foreign currency to cover essential needs.

Exchange data showed foreigners were net sellers of treasury bills worth 51.3 billion Egyptian pounds ($988 million) and bonds worth 6.5 billion pounds ($125 million) on Wednesday. Thar compared with net sales of 62.1 billion pounds ($1.1 billion) in bills and bonds on Tuesday.

Despite the outflows, the dollar exchange rate was little changed, with the selling price at the National Bank of Egypt closing at 52.02 pounds.

Egypt has been hit by a strong wave of foreign investor exits from the government debt market since the US-Israeli war against the Iranian regime intensified. A government source said on March 9 that more than $5 billion in hot money had left since the war began.

Prime minister said at a press conference Tuesday that the government was working with the Central Bank to secure foreign currency resources to avoid any crisis in covering basic needs. Egypt’s foreign reserves stood at $52.6 billion in January, according to Central Bank data.

Egypt faced a shortage of dollar liquidity in 2023 and 2024 after foreign investors pulled about $20 billion from the debt market in 2022 amid the war in Ukraine.