“Egypt’s commercial banks provided USD to investors in March, helping keep the EGP stable during a bond selloff” in a replay of the 2018 emerging markets rout that hit Egypt alongside other global markets, Bloomberg reports. Reuters also has the story.

Egyptian banks’ net foreign assets (NFAs) dropped 45% m-o-m to EGP 196.66 bn, from EGP 358.78 bn in February, according to data from the Central Bank of Egypt (CBE). The EGP 162.12 bn drop came as the covid-19 pandemic spurred capital outflows from the country and other emerging markets, which saw investors pulling a record USD 83 bn from EMs. Net liabilities at commercial banks rose EGP 15.60 bn m-o-m in March to EGP 251.36 bn.

Analysts say we’ve “seen the worst” of the capital outflows. “We are not overly concerned as we have been there post the 2018 sell-off and recovered fairly well,” Renaissance Capital’s head of MENA research Ahmed Hafez tells Bloomberg. In 2018 the emerging markets zombie apocalypse caused Egyptian banks’ NFAs to turn negative in July, and the spread between NFAs and liabilities at commercial banks continued to widen until January 2019. The gap was ultimately closed in February 2019, according to CBE data.

Fresh IMF funding to bolster investor confidence: Egypt seeking fresh funding from the IMF under a one-year rapid financing instrument and a separate stand-by agreement should also do its part in bolstering investor confidence, Bloomberg says. The Madbouly Cabinet has yet to disclose how much financing Egypt is seeking from the lender.