Return of hot money foreshadows even more debt for Egypt
Egypt has witnessed a large inflow of short-term debt in recent weeks. Al-Monitor Pro explains why the government hasn't been able to wean itself off of "hot money" and the economic impact.
To:
Al-Monitor Pro Members
From:
Marc Español
Journalist covering Egypt and Sudan
Date:
March 3, 2023
Bottom Line:
On the back of a sharp devaluation of the Egyptian pound on Jan. 11 and the highest interest rates in over five years, Egypt has witnessed a large inflow of short-term debt in recent weeks. But the return of large amounts of hot money raises doubts about Cairo’s ability to wean itself off these inflows anytime soon as other sources of more sustainable revenues, such as foreign direct investments (FDI) and exports, take time to materialize.