Cairo - Mubasher: Egypt is mulling over issuing Egyptian pound-denominated bonds on the international debt market in a bid to boost foreign inflows and reduce the borrowing cost, government sources said.
Investors would buy the debt notes in dollars, while the principal and interest would be payable in Egyptian pound, sources told Bloomberg News.
It means that the buyer would bear the risk of any fluctuation in the exchange rate, they added.
A pound-denominated international bond is one of a slew of options the North African nation is weighing up in an effort to diversify its funding sources and reduce the soaring cost of debt.
The Egyptian government is in talks with several lenders about the possibility of issuing the proposed local-currency bonds with a lower yield than on debt issued domestically because the transaction can be cleared through Belgium-based settlement company Euroclear, according to Bloomberg.
A government source previously revealed that Egypt was looking to issue foreign-currency Eurobonds worth $20 billion until 2022 in an effort to diversify its funding sources.
The Arab world’s most populous country is also considering the possibility to issue Japanese Yen and Chinese Yuan-denominated bonds ranging between $4-7 billion, a government sources previously told Enterprise.
