Egypt’s return to JP Morgan’s emerging-market government bond index could attract $4.8 billion in new inflows, Rand Merchant Bank (RMB) estimated on Monday.

Egypt was delisted from the index in 2011, and has been working towards its return for the last two years. It is currently expected to be included in the second half of 2021, said RMB economist Neville Mandimika.

The return to the index could cause the Egyptian pound to appreciate by 5 percent against the dollar.

The emerging-market government bond index is a benchmark index for measuring the total return performance of international government and corporate bonds issued by emerging market countries that meet specific liquidity and structural requirements.

Egypt has done unusually well in improving its macroeconomic fundamentals after finishing an International Monetary Fund program in 2019 and has had consistent primary budget surpluses that have paved the way for its debt-to-gross-domestic-product profile to compress, RMB said.

Egypt has a combined nominal $28.2 billion in eligible bonds that mature in more than 2.5 years, the minimum amount for inclusion in the index, Mandimika said.

Egypt could receive a 2 percent weighting in the index and divert a portion of some $240 billion of assets under management.

Yields tend to decrease naturally by 130 basis points on average before an inclusion, Mandimika said.