The EGP recorded its highest level against the greenback in over a year, extending its rally. The USD was changing hands at EGP 48.40-48.50 at the National Bank of Egypt and Banque Misr and at EGP 48.38- 48.48 at CIB, by the end of yesterday’s trading.

Surging FX flows to thank: Local banks are witnessing a significant momentum in USD inflows and the greenback is available in all banks, a banker told EnterpriseAM. This momentum is driven by seasonal tourism revenues, easing regional tensions, and the increasing interest from foreign investors and funds in our local debt and stock markets, the source added.

Investors flock to short-term debt: Short-term debt instruments remain the most attractive options for foreign investors, the banker said.

A closer look at investor appetite: The Central Bank of Egypt sold over EGP 60 bn worth of EGP-denominated t-bills during an auction on Sunday, according to data from its website. The CBE sold EGP 36.2 bn worth of three-month t-bills — it was after EGP 20 bn — and EGP 24 bn worth of nine-month t-bills, missing its target of EGP 35 bn after investors requested yields that went up to 31.0%

The strength of the EGP hasn’t brought down the yield investors are demanding at action: The bank accepted yields of up to 29.2%, a notable increase from the figures seen in June, CBE data shows.

For more on what’s driving the EGP’s rally, check out our in-depth coverage here and here.

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