The annual cost of Egypt’s sovereign credit default swap decreased by an average of 2.63% last week, according to research by investment bank Beltone.
The cost of insuring risks of government bonds is the value that is added to the price of bonds. This value is associated with the risks of the state’s inability to repay the debt value.
The higher the risks in the country the higher the cost of insuring its sovereign debts.
Beltone’s research mentioned that the flexibility the exchange rate regime gained in the past few days has led to an improvement in a number of indicators, including Beltone’s investor confidence index that increased last week by 0.6%, registering 54.3 points compared to 54 points.
Beltone asserted that the pound’s devaluation and the increase in the return on treasury bills will increase investors’ confidence.
Beltone also expected that the Egyptian Stock Exchange (EGX) will succeed in attracting new investments after the Central Bank of Egypt (CBE) recently decided to devalue the Egyptian pound against the US dollar in the official market. After CBE’s step, the dollar amounted to EGP 8.78, compared to EGP 7.83 before the increase.
