Figures obtained by Daily News Egypt indicated the government’s intention to expand the process of borrowing from the domestic market, to fill the chronic deficit in the state’s budget significantly, during the last quarter of fiscal year (FY) 2018/2019.
According to those figures, the Ministry of Finance intends to offer bids for treasury bills (T-bills) and bonds worth EGP 475.5bn between July and September this year, making it the largest borrowing rate through debt instruments in Egyptian history.
A plan by the Ministry of Finance, obtained by Daily News Egypt, revealed that the government is targeting issuing T-bills worth EGP 433bn and T-bonds worth EGP 42.5bn.
The Central Bank of Egypt (CBE), which is carrying out the task on behalf of the government, is offering bids for T-bonds and bills worth EGP 182bn in July, another tranche of EGP 147bn in August, and EGP 146.5bn in September.
The CBE will float 91-day T-bills worth EGP 108.25bn, 182-day bills of the same value, 273-day worth EGP 105bn, and 364-day bills worth EGP 111.5bn, according to the plan.
The government’s plan also includes the issuance of three-year bonds due in July 2021, worth EGP 8bn, another set of three-year bonds due in September 2021, worth EGP 4bn, and five-year bonds due in July 2023, worth EGP 12.5bn.
Moreover, the government will offer seven-year bonds due in August 2025, worth EGP 6bn, eight-year bonds due in July 2026, worth EGP 3bn, and 10-year bonds due in May 2027, worth EGP 9bn.
The government had borrowed about EGP 1.61tn through debt instruments throughout FY 2017/2018.
Between the months of July and September 2017, the government borrowed EGP 371bn, aside from EGP 389.25bn between October and December 2017, EGP 415bn between January and March 2018, and EGP 438.75bn between April and June 2018.
Bonds and bills are issued through 15 banks participating in the primary dealers’ system in the primary market, according to an agreement between the government and banks since 2004. Also, these banks sell a portion of these bonds and bills in the secondary market, to individual investors, as well as local and foreign institutions.