The Egyptian government intends to borrow EGP 1.055trn from the local market during the third quarter (3Q) of fiscal year 2022/23, with the aim of financing the state budget deficit.
According to the government’s plan, the Ministry of Finance aims to issue 52 treasury bill tenders worth EGP 1.014trn and 30 bond tenders worth EGP 41.25bn from January to March 2023, which reflects the government’s need for liquidity in the short term.
The Central Bank, which undertakes this task on behalf of the government, will launch the T-bill and bond tenders worth EGP 404.25bn in January, EGP 325.75bn worth of tenders in February, and EGP 325.75bn worth of tenders in March.
According to the plan, the value and term of those T-bills will be as follows: EGP 172.5bn T-bills for 91 days, EGP 263.5bn for 182 days, EGP 276.5bn T-bills for 273 days, and EGP 302bn for 364 days.
It is also scheduled to offer “zero coupon” bonds for a year and a half at a value of EGP 16bn, 3-year bonds worth EGP 23bn, 5-year bonds worth EGP 1.5bn, and 7-year bonds worth EGP 750m.
The banks operating in the Egyptian market are the largest sectors investing in bonds and treasury bills that the government offers periodically to cover the state budget deficit.
These bonds and bills are offered through 15 banks that participate in the system of “primary dealers” in the “primary market”, and those banks resell part of them in the “secondary market”, to individual and local and foreign institutional investors.
The Ministry of Finance had revealed that the volume of outstanding balances of local treasury bills and bonds amounted to about EGP 4.3trn until the end of November 2022.
According to the latest report published by the ministry on its website, the volume of outstanding balances of treasury bills until the end of November amounted to about EGP 1.732trn, with about EGP 686.597bn for 364-day bills, about EGP 133.091bn for 273-day bills, and about EGP 357.024bn for 182-day bills, in addition to about EGP 555.501bn in 91-day bills.
According to the Ministry of Finance, the maturity date for these permits extends from 6 December 2022 to 28 November 2023, taking into account that other bills are re-offered with the same deadlines on a weekly, periodic basis.
This comes as the Ministry of Finance revealed that the volume of outstanding balances of treasury bonds at the end of September amounted to about EGP 2.568trn, of which about EGP 280.501bn were “zero coupon” bonds.
According to Finance, the maturity date for these bonds extends from 1 November 2022 to 18 January 2037, also taking into account that other bonds are re-bid on a weekly, periodic basis, just like the bills.
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