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Was Egypt's bond sale a sign of hope or desperation?

Egypt raised $4 billion in a debt sale to help finance its budget deficit, but some economists emphasize that the government must ultimately find ways to generate income if it is to successfully deal with its economic problems and settle its debt.
Finance Minister Amr El-Garhy at a news conference in Cairo, Egypt August 11, 2016. REUTERS/Mohamed Abd El Ghany - S1BETUVOVSAA
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CAIRO — Egyptian Finance Minister Amr El-Garhy claimed in a Feb. 26 press conference that the government's issuance of bonds that month had met with unprecedented success, revealing strong foreign confidence in the Egyptian economy. Egypt raised $4 billion in the debt sale and triggered $12 billion in bids by investors. The high demand and profits from the sale will cover a significant portion of the interest that the government has to pay to the buyers.

Egypt listed the bonds Feb. 14 on the London Stock Exchange, a move that many economic analysts had cautioned against. The Central Bank of Egypt (CBE) received the proceeds from the sale on Feb. 22. Some economic experts deemed the quick sale of the bonds and the large number of bids as a sign of the Egyptian economy's stability, given that the high demand for the bonds led to a drop in their yield and interest. Others, however, believe Egypt will not be able to fulfill its debt obligations, as it is increasingly indebted by the day.

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