2023-08-27 13:46:00
The cost of debt insurance hit a two-week low
Dubai – Al Arabiya.net
Posted on: August 27, 2023: 05:46 PM GST Last updated: August 27, 2023: 06:16 PM GST
After several reports indicating the possibility of the Egyptian pound declining against the dollar, due to the approach of a new flotation linked to the first International Monetary Fund review scheduled for next month, the green currency was pushed up on the black market to the level of 41 pounds. But BRICS’ invitation to 6 countries, including Egypt, to join the group brought about an immediate change.
The Egyptian pound witnessed a significant improvement in its performance against the dollar on the black market, coinciding with the Egyptian government’s announcement to provide the dollar to a number of importers, and news about diversifying funding sources away from the dollar, benefiting from joining the “BRICS” group, which prompted a decline in black market prices near the level of 39. pounds to the dollar.
The cost of financing on Egypt’s 5-year sovereign debt, known as “CDS”, fell to its lowest level in two weeks at 1436 points, as it declined on average by more than 1.5% per day over the past five days, down from the highest level recorded since last July of 1562 points. a point.
BRICS invited Saudi Arabia, Egypt, the UAE, Argentina, Ethiopia and Iran to join the group during its meeting in Johannesburg last week.
Monica Malik of Abu Dhabi Commercial Bank said that membership of the “BRICS” group may eventually help Egypt attract more investment.
She added, “Egypt’s accession is a positive thing for it. It is true that the impact is expected to be limited in the short term, but it may help in strengthening its relations with the major emerging market economies.”
While the analyst from FIM Partners, Charles Robertson, said that obtaining low-cost financing from the New Development Bank will help Egypt, in addition to rapprochement with China, which is a potential source of huge foreign direct investment in the Egyptian industry.
Robertson added, “Egypt has two urgent needs, which are obtaining foreign direct investment and lower cost debt, and BRICS membership may contribute to achieving both.”
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