News

Egypt Turns to the Chinese Currency With Yuan-Denominated Bonds

Egypt Turns to the Chinese Currency With Yuan-Denominated Bonds

NICOLAS ASFOURI/AFP via Getty Images

Egypt’s Minister of Finance, Mohamed Maait, announced during a press conference on 29 August that Egypt is planning to issue international bonds denominated in the Chinese yuan worth more than USD 500 million (EGP 9 billion).

The Minister added that Egypt postponed the issuance of its dollar bonds due to high-interest rates, and that the country is preparing to issue sovereign sukuks (Islamic bonds) worth USD 1.5-2 billion (EGP 38 billion), but the current market conditions are not appropriate.

Bonds are financial securities that support a government’s efforts to raise money, in which an investor lends money to a government for a set period of time in exchange for regular interest payments.

This comes as part of Egypt’s plan to issue international bonds worth between USD 6 billion (EGP 115 billion) this year, and to diversify the currencies in which it issues its bonds in the hopes of attracting new investors.

China has made it clear that it plans to offer an alternative to the U.S. dollar as the world’s reserve currency. Russia has already turned to the Chinese yuan after facing sanctions from the West due to its invasion of Ukraine earlier this year, and other countries including Singapore, Chile, Hong Kong and Indonesia have also collaborated with China to create a yuan reserve pool.

Egypt is ​​expecting a 15 percent increase in spending and a 14.5 percent rise in deficit, according to the 2022-2023 budget that has been approved by the parliament this year. Goldman Sachs Group Inc. estimates Egypt may need to secure a USD 15 billion (EGP 286 billion) package from the International Monetary Fund (IMF) to meet its funding requirements over the next three years.

In March, Egypt became the first country in the Middle East to issue Samurai bonds, which are ​​yen-denominated bonds issued in Tokyo. This drew the attention of Japanese investors, Maait says, and reflects their confidence in the Egyptian economy.

In September of last year, Egypt issued USD 3 billion (EGP 57 billion) bonds in September before the US Federal Reserve raised interest rates.

All-Egyptian Migrant Boat Sinks, Leaving 2 Dead and 19 Missing
USAID to Fund Egypt’s COVID-19 Response With USD 9 Million

Subscribe to our newsletter


News

More in News

Egyptian Actress Menna Shalaby Released on Bail Over Suspected Drug Use

Egyptian Streets26 November 2022

Rainbow Colours Now Allowed at Qatar World Cup for Welsh Fans

Mona Abdou25 November 2022

Egypt Invited to Participate in Intergovernmental G20 Summit

Mona Abdou25 November 2022

Egyptian Parliament Health Committee Members to Donate Organs After Death

Egyptian Streets24 November 2022

EIB Offers Egypt €150 Million for Food Sector

Mona Abdou24 November 2022

40% of Egypt’s Public Investing is Green: Egyptian Cabinet

Mona Abdou23 November 2022

Egypt Issues Decree to Regulate the Price and Quantities of Rice

Egyptian Streets22 November 2022

Sisi Underscores Importance of Peace and Stability at African Union Summit

Mona Abdou22 November 2022