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Insurance against Egypt debt default at 30-month high on political violence Soar in credit default swaps makes it more expensive for Egypt to take on further debt
The cost of insuring Egyptian sovereign debt against default for five years surged 60 basis points on Monday to its highest in 2-1/2 years as deadly clashes in Cairo between protestors and government authorities entered its third day. Five-year credit default swaps traded at 525 bps, its highest since March 2009, according to Markit data. The government said on Monday that the death toll in Cairo's Tahrir Square reached 20 people. The Egyptian pound slipped towards last week's lows of 5.9890 per dollar that marked the weakest levels since January 2005. Markets also expect significant depreciation in coming months, with non-deliverable forwards pricing in a roughly 5 per cent fall in the pound in the next three months. The Cairo stock market benchmark fell 2.3 per cent, bringing year-to-date losses to over 45 per cent.
