Egypt's economic growth 'being held back by treasury bond market'
The reluctance of Egypt's banking sector to open up its treasury bond market is hampering economic growth in the country.This is according to Reuters, which explained there are currently 15 commercial banks in the nation that have a deal with the government, enabling them to purchase treasury bills directly and "sit on easy and risk-free sovereign debt".
As a result, the government needs to pay a risk premium on its debt because it is difficult for investors to buy securities on Egypt's secondary market, meaning cash that could be spent on boosting the economy is being diverted elsewhere.
The administration has been attempting to expand debt markets for some time and the country is becoming increasingly attractive for investors, meaning there is a "pressing need" for the securities market to become more liquid.
Inflation in the country eased last month, which, according to Bloomberg, has increased the likelihood of the interest rate being kept at a four-year low by the central bank.