Yara El-Janaini_ Hassan Abdalla, Governor of the Central Bank of Egypt (CBE), stated that the risk premium associated with Egypt's external borrowing has declined to approximately 3%, compared to elevated levels that reached around 25% at one point on US dollar borrowing.
Abdalla explained, during a panel discussion titled "Foreign Exchange Resources and Debt Management" at Egypt 2026 Forum, that the reduction in the risk premium enables Egypt to borrow from abroad at a more favorable cost, compared to periods when risks witnessed a sharp increase.
He added that the improvement in the Egyptian economy's indicators is not limited to lower inflation and increased foreign currency reserves, but also encompasses an improvement in risk indicators associated with the economy and its ability to secure external financing.
He pointed out that the flexible exchange rate regime allows foreign currency to be priced in accordance with market mechanisms, emphasizing that boosting foreign currency resources from the real economy constitutes the foundation for supporting exchange market stability.
