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Egypt’s dollar bonds were higher by 1.5-2 points after the central bank hiked its policy rate by 100bp. Its deposit and lending rates now stand at 19.25% and 20.25% respectively, the highest since 2006. The rate hike was a surprise as analysts expected no change in policy until the nation built up its forex buffers to be able to handle another currency devaluation. Egypt’s inflation stood at 35.7% in June with the monetary policy committee noting that “inflation rates are likely to peak in the second half of 2023 before beginning a disinflation path”. Egypt is yet to receive funding from other Gulf Arab nations and its IMF review for a $3bn rescue program has been delayed.
Egypt’s 7.053% 2032s were up 1 point to 60.39, yielding 15.67%
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