Egypt PM says Saudi's planned $5 bln investment independent of cenbank deposit
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DUBAI, Sept 19 (Reuters) -Egypt's Prime Minister Mostafa Madbouly said on Thursday that a planned Saudi Arabian investment of $5 billion in Egypt is independent of funds the Gulf state has deposited in the country's central bank, sending bond prices higher.
The country's sovereign dollar bonds rallied to fresh two-year highs. The 2059 maturity gained the most, rising 1.35 cents, to bid at 77.60 cents on the dollar by 1309 GMT, Tradeweb data showed.
Near-term maturities were bidding as high as 99.52 cents.
"The $5 billion investments will be in projects that will be decided mutually later in important economic sectors," Madbouly said.
Egypt's bonds had already rallied on Tuesday to either close to, or above, highs last hit in early 2022, a day after the Egyptian cabinet first said that Saudi Crown Prince Mohammed bin Salman had directed the kingdom's sovereign wealth fund (PIF) to pump $5 billion worth of investment into Egypt in what it called a "first stage".
Saudi Arabia has $5.3 billion in medium to long-term deposits in Egypt's central bank, according to the bank's data. It also deposited $5 billion in short-term deposits in 2022 which are believed to have been rolled over since then.
Egypt has been seeking large-scale investments as it tries to overcome a long-running economic crisis that led to record inflation, a rising debt burden and sharp currency devaluations over the past two years.
The North African nation got a boost earlier this year after it signed the Ras El Hekma deal with the United Arab Emirates to develop a prime stretch of Mediterranean coast and secured billions in funding from international lenders.
Cairo is now allocating five areas on its Red Sea Coast for large-scale investments, including Ras Banas, a 30-kilometre (19 mile) peninsula across from Saudi Arabia in the far south of Egypt.
It is one of few parts of the North African country's coastline that has not been developed for tourism.
"We allocated five large areas on the Red Sea coast, we aim to develop these areas as the developmental centres established like in the Ras El Hekma deal," he said.
Reporting by Nayera Abdallah, with additional reporting by Libby George in London; editing by Jason Neely and Sharon Singleton
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