Cairo- The Egyptian Ministry of Investment and International Cooperation said on Saturday the foreign direct investment (FDI) in Egypt rose by 12% in the first nine months of the fiscal year 2016-17, recording $6.6bn compared to $5.9bn in the same period of 2015-16. Egypt’s FY starts on 1 July and ends in 30 June.
The ministry’s statement added that Egyptian foreign direct investment net inflows increased by 12% to reach $6.6bn from July 2016 to March 2017, compared to $5.9bn during the same period a year earlier.
Ahmed Kojak, former deputy minister of finance for fiscal policy said earlier this month said his country attracted foreign investments up to $9.8 billion in the current debt tools during the last fiscal year.
Kojak added that foreign investment in domestic treasury bills and bonds reached $1.250 billion in June alone, and about $9 billion since the flotation.
He explained that foreign investors in the Egyptian debt tools reached $1.1 billion in the 2015-2016.
The Egyptian Central Bank has liberated on November 3 the Egyptian pound exchange rate, which increased the investors’ appetite to buy Egyptian shares and high-profit bonds. The International Monetary Fund (IMF) agreed to pay the second installment of a $12 billion-loan, and hailed the difficult economic reforms applied by the government, despite that they significantly raised inflation rate.
The International Monetary Fund’s Managing Director, Christine Lagarde said in a statement on Thursday that the IMF’s approval to pay Egypt around $1.25 billion on the loan shows the fund’s serious support to the Egyptian efforts.
The IMF and Cairo have agreed on the loan in November, in line with the Egyptian government’s approval to drop the pound’s value and to apply a value added tax (VAT) aiming to improve the financial situation and the government’s reserve of foreign currency. Cairo had also reduced its oil support many times till last month.
Lagarde said: “we think these efforts will lead to great results.”
However, concerns about inflation rate which reached 32.9% in April rose before it slightly decreased in May.
International Monetary Fund deputy managing director David Lipton said the authority’s immediate priority is to reduce inflation, which poses a risk to macroeconomic stability and hurts the poor. The Central Bank of Egypt has taken significant steps to reduce inflation by raising policy interest rates and absorbing excess liquidity.
In June, the Egyptian government announced it increased oil prices by 55%, in the second prices ascension since the flotation process in November. Analysts thought that the increase of oil prices will increase the inflation rate; the Egyptian pound price rose to $18 compared to $8.9 in November.