Egypt’s local-currency borrowing costs surged the most in three months after Moody’s Investors Service cut ratings of local banks due to their exposure to government debt and the central bank raised interest rates.
Egypt’s borrowing costs are set to drop as the slowest loan growth three years amid escalating political turmoil prompts banks to park funds in government notes, the Middle East’s top money markets fund manager said.
When two Egyptian banks refused to give Ahmed El-Rifai the dollars his digital media company needed to pay Facebook Inc. last month, he turned to a more reliable source: the black market at a premium of about 8 percent.
National Bank of Egypt’s sale of five-year bonds will total as much as $600 million and may be priced to yield about 5.25 percent, according to a banker involved in the transaction. The notes are being issued through Nile Finance Ltd.