Egypt signs agreement with Euroclear
Egyptian debt is one step closer to being Euroclearable: Egypt signed a “terms and conditions” agreement with Euroclear on the sidelines of the IMF and World Bank annual meetings in Washington, cabinet said in a statement yesterday. The agreement paves the way for local debt issuances to be cleared with the Belgium-based clearinghouse after Egypt has set up a central securities depository. The move is designed to make Egyptian debt more accessible to foreign investors, who can currently only access the debt market through a few local banks licensed to operate as primary dealers. Vice Finance Minister Ahmed Kouchouk said the agreement would increase the liquidity and demand for government debt, and lower servicing costs. Reuters also has the story.
The House will get to work today: The House of Representatives’ Economics Committee will begin discussing the necessary amendments to the Central Depository and Registration Act today, the local press reports. The new mechanism will likely be up and running by early 2020, a Finance Ministry official said, adding that it will start immediately after the amendments are passed and the depository is established.
Background: Egypt, which had first signed an MoU with Euroclear in April, plans to issue USD 3-7 bn in international bonds during FY2019-2020. The cabinet approved setting up the new central clearing and depository company in June.