The volume of outstanding balances of treasury bonds (T-bonds) in local currency owed by the government has increased by EGP 21.65bn at the end of January 2018, to reach EGP 698.33bn from EGP 676.68bn in December 2017, according to the Ministry of Finance.
Banks working in the Egyptian market are considered the biggest investors in treasury bonds and bills (T-bills), which the government issues on a regular basis to bridge the state budget deficit.
T-bonds and T-bills are proposed via 15 banks, which are the primary dealers in the primary market. A portion of these bills and bonds are resold by these banks in the secondary market to retail investors, as well as local and foreign institutions.
In a recent report, the ministry explained that the coupon yield bonds balance recorded EGP 696.131bn, with an average return rate of 14.176% ranging between 9.15% and 18.75%.
These bonds were floated in the period from 12 February 2008 until 30 January 2018 and will be paid between 4 February 2018 and 7 November 2027.
According to the ministry, the zero-coupon bonds scored a balance of EGP 2.203bn at the end of December 2017.
These bonds carry an interest rate of 10.885% and 16.514%, an average of 12.679%.
The bonds were proposed between 6 September and 4 October 2016 and will be paid between 6 March and 3 April 2018.
Daily News Egypt had earlier revealed the government’s intention to bid for treasury bills and bonds worth EGP 415bn between January and March 2018, making it the largest governmental borrowing through debt instruments since their introduction.
The state suffers from a deficit in the general budget estimated at about EGP 370bn in fiscal year 2017/2018, according to a previous statement by Finance Minister Amr El-Garhy.
A plan by the Ministry of Finance, obtained by Daily News Egypt, reveals that the government is targeting issuing treasury bills worth EGP 384bn and treasury bonds worth EGP 31bn.
It is worth noting that the Egyptian government had borrowed about EGP 1.336tn through treasury bills and bonds in 2017.