Egyptian government plans to borrow EGP 647.5bn from the local market through issuing treasury bills (T-bills) and bonds during the third quarter of FY20/21, according to a government document .
The plan, which will be put into effect during the third quarter (Q3) of fiscal year (FY) 2020/21, aims to bridge the chronic deficit in the state budget.
According to the government’s plan, the Ministry of Finance intends to issue 52 bids for T-bills worth EGP 463.5bn during the period from January to March 2021. This will come in addition to the ministry’s issuing of 32 bond bids worth EGP 184bn in the same time period.
The Central Bank of Egypt (CBE), which undertakes this task on behalf of the government, will issue bids for T-bills and bonds worth EGP 199.5bn in January. This will be followed by the issuance of bids worth EGP 199.5bn in February, and EGP 248.5bn in March.
According to the plan, 91-day term T-bills worth EGP 62bn will be offered, alongside: 182-day T-bills worth EGP 94.5bn; 273-day T-bills worth EGP 146bn; and 364-day T-bills worth EGP 161bn.
The government’s plan also includes offering two-year bonds worth EGP 15bn, three-year bonds worth EGP 40.5bn, and five-year bonds worth EGP 46.5bn.
The Ministry of Finance will also offer seven-year bonds worth EGP 47.5bn, and 10-year bonds worth EGP 31.5bn.
The Ministry is also offering new 15-year bonds worth EGP 3bn, the third time that government bonds of this time-length have been offered in the local market.
The CBE revealed that the volume of domestic public debt reached about EGP 4.354trn at the end of December 2019, of which 87.8% was due by the government. A further 5.9% was due by economic public bodies, and 6.3% by the National Investment Bank (NIB).
Banks operating in the Egyptian market are the largest sector investing in bonds and T-bills, which the government issues periodically to cover the state’s general budget deficit.
These vessels are offered through 15 banks that participate in the primary dealers system in the primary market. They then sell part of them in the secondary market, to individual investors and local and foreign institutions.
