Egypt Excluded from JPMorgan’s Emerging Market Bond Index

JPMorgan, a major financial institution, has recently announced its decision to remove Egypt from its emerging market government bonds index. 

Effective 31 January 2024, Egypt will be removed from JPMorgan’s emerging market government bonds index. This decision follows JPMorgan’s examination of Egypt’s economic situation since 21 September 2023, due to concerns regarding challenges in converting foreign currency for investors.

Egypt had maintained a weight of 0.61 percent in the global index until 29 December. JPMorgan stated, “Egypt has been under Index Watch since September 21, 2023, due to reported material FX convertibility issues by benchmarked investors.”

After being away for 10 years, Egypt was relisted to the JPMorgan Index for government bonds of emerging markets in January 2022. During its return, 13 bonds in Egyptian pounds were included in the index. These bonds had different maturity dates, ranging from 2024 to 2030.

In simple terms, the reason for this exclusion is that there have been difficulties with foreign currency conversion in Egypt. Investors have faced challenges in converting their money into foreign currency.

Previously, Egypt had a small portion of its bonds included in the list, but now it will no longer be considered. Egypt was previously removed in June 2011 as a result of economic and political instability following the 25 January Revolution, which affected the country’s ability to meet the requirements for inclusion.