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Egypt: Carry trade could end in tears following food-price reforms

By David Whitehouse
Posted on Tuesday, 14 September 2021 18:30

Egyptian President Abdel Fattah al-Sisi plans to reform bread subsidies. (AP Photo/Evan Vucci)

Investors piling into Egyptian Treasury bills, yielding between 11% and 13%, risk disappointment as President Abdel Fattah al-Sisi seeks to push through the first increase in bread prices in decades, analysts say.

Al-Sisi said on 3 August  that he will reform the country’s bread subsidy system. It’s the first attempt to do so since 1977, when price increases imposed by President Anwar Sadat were withdrawn in the face of rioting.

Egypt has withdrawn most of its energy subsidies, but an estimated two-thirds of the population still benefit from cheap bread prices, which cost the government about $3bn a year.