Egypt’s foreign reserves to reach $41B after Eurobond issuance

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Sat, 24 Feb 2018 - 01:32 GMT

BY

Sat, 24 Feb 2018 - 01:32 GMT

FILE- Central Bank of Egypt

FILE- Central Bank of Egypt

CAIRO – 24 February 2018: Egypt’s foreign reserves could surpass $41 billion for the first time after Egypt received the proceeds from its recent eurobond issuance, which amounted to $4 billion, banking sources said Saturday.

The country’s international reserves stood at $38.2 billion in January 2018.
Finance Minister Amr el-Garhy said that the $4 billion proceeds from the eurobonds issuance has been added to the ministry’s account at the Central Bank of Egypt (CBE) last week.

He added that the demand on Egypt’s eurobonds represents the increasing investors’ trust in the Egyptian economy in light of the economic reform program.

Egypt returned to the international bond markets on February 14 with issuing Eurobonds worth $4 billion on three tranches; three, five and 30 years, the Finance Ministry said in a statement.

The purchase requests exceeded $12 billion in the first few hours after the issuance despite the volatility of the international stock markets, the statement said.

The outturn will be used to bolster the central bank’s foreign currency reserves, while the cash equivalent in Egyptian pounds will be directed to finance the activities of the state budget, the statement said.

Deputy Minister of Finance for Financial Policies Ahmed Kojak said that the Egyptian issue in the international markets has attracted more than 550 international investors from all target markets: Europe, America, Asia and the Middle East.

He added that they had received orders to buy bonds in large numbers, exceeding $500 million per investor.

Egypt issued $7 billion in Eurobonds' sales in January and May 2017 on the global bond market, both of which were oversubscribed, according to the Ministry of Finance.

Egypt had embarked on a bold economic reform program that included the introduction of taxes, such as the Value added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.

The country has floated its currency in November 2016 before it clinched a $12 billion loan from the International Monetary Fund (IMF).

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