Egypt’s PM says Saudi Arabia’s planned $5 billion investment is separate from the cenbank deposit

Egyptian Prime Minister Mostafa Madbouly said on Thursday that Saudi Arabia’s planned $5 billion investment in Egypt is separate from the money the Gulf state has put in the country’s central bank. This made bond prices go up.

People bought the country’s national dollar bonds at their highest levels in two years. According to Tradeweb data, the 2059 term gained the most, going up 1.35 cents to be offered at 77.60 cents on the dollar at 13:09 GMT.

Bidding went as high as 99.52 cents for short-term investments.
“The $5 billion investments will be in projects that will be decided mutually later in important economic sectors,” Madbouly told us.

Before the Egyptian cabinet announced that Saudi Crown Prince Mohammed bin Salman had told the kingdom’s sovereign wealth fund (PIF) to invest $5 billion in Egypt in what it called a “first stage,” Egypt’s bonds had already gone up to levels close to or above the all-time highs set in early 2022.

Egyptian’s central bank says that Saudi Arabia has $5.3 billion in medium- to long-term savings. Furthermore, it put $5 billion into short-term savings in 2022, which are thought to have been carried over since then.

Egyptians are looking for big investments as they try to get out of an economic crisis that has been going on for a long time and has caused record inflation, rising debt, and sharp drops in the value of their currency over the past two years.

There was good news for the North African country earlier this year when it made the Ras El Hekma deal with the United Arab Emirates to develop a great stretch of Mediterranean coast and got billions of dollars in loans from other countries.

For big investments, Cairo is now preparing five places on the Red Sea Coast. One of these is Ras Banas, a 30-kilometer (19-mile) peninsula in the far south of Egypt that faces Saudi Arabia.

There aren’t many parts of the North African country’s shore that haven’t been built up for tourists.

“We allocated five large areas on the Red Sea coast, we aim to develop these areas as the developmental centers established like in the Ras El Hekma deal,” he told us.