Egypt is officially ready to rejoin JP Morgan’s Emerging Markets Bond Index (EMBI) in January 2022, according to Minister of Finance Mohamed Maait on Sunday.
Egypt will be returning to the index after being delisted from the index in 2011, with the government working towards its comeback over the last 3 years.
The return is in line with the Egyptian government’s efforts to reduce the cost of public debt as part of the country’s economic reforms, said Maait.
JP Morgan announced Egypt’s return in October, asserting that the country is eligible to join the index with an estimated weight of 1.8% with 14 government bonds with a total value of $24 billion. It also stated that 90% of investors surveyed supported the inclusion.
January will also mark Egypt’s joining on the JP Morgan’s Environment and Governance Index by end of the month with 1.1% of the index, based on Egypt’s issuance of its green bonds in October 2020, according to the minister.
The Finance Minister pointed out that Egypt joins the index with 14 government bonds valued at $26 billion, adding that the action will allow large investment funds and foreign investors to invest in Egypt’s debt instruments in local currency.
The minister expects around $1 billion in new investments to be pumped in the Egyptian governmental equity market as a result.
Deputy Finance Minister for Financial Policies Ahmed Kojok said that the action comes as a result of the ministry’s strategy to raise the efficiency of public debt management with a medium-term plan to decrease debt and its service costs.