Aftermath of Currency Devaluation – Egypt Records $500 Million Worth of Foreign Investments

Foreign investors bought $500 million in Egyptian debt and stocks since the central bank devalued the currency this month, according to central bank Governor Tarek Amer, who said more measures will be taken to attract funds. Amer said he expects at least $5 billion in portfolio investments — purchases of stocks and bonds — within the coming four months. Foreign direct investment from China alone could reach $30 billion in the next two years, he said.

The central bank allowed the biggest one-time depreciation of the pound since 2003 on March 14 and promised to adopt a more flexible exchange rate. The moves were designed to revive investor interest in Egypt to ease a dollar crunch that has hampered economic growth and fueled a black market for the currency. Hard currency deposits in local banks, increased after the central bank started “to fix the status of the currency,” Amer said. The central bank will continue “arranging matters so that we have the ground ready to receive” the expected inflows, he said, without elaboration. Read full details of this story here.