Default Jitters Stalk Egypt, Sending Traders on Wild Ride
- Default risk is region’s highest relative to five-year average
- Egypt needs to secure external financing to stave off default
A dump truck transports construction materials in the central business district of Egypt's New Administrative Capital, east of Cairo in Egypt.
Photographer: Islam Safwat/Bloomberg
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An already turbulent year for emerging-market traders is getting another shot of adrenaline as Egypt fights to avert a debt crisis.
The north African nation has become the latest symbol of the distress gripping poorer nations on the back of surging inflation, rising yields and a grinding down of global growth. Investors, still smarting from recent defaults by Russia and Sri Lanka, are watching Egypt as a case study to gauge whether -- and how quickly -- the broader developing world can sidestep a full-blown foreign-currency debt crisis and navigate the coming era of tighter credit conditions.