The Ministry of Finance announced that the local treasury bills and bonds balances reached about EGP 4.962trn in 2023, according to its latest report on its website.
The report showed that the treasury bills balances amounted to EGP 2.67trn, distributed as follows: EGP 1.172trn for 364-day bills, EGP 229.796bn for 273-day bills, EGP 395.297bn for 182-day bills, and EGP 872.638bn for 91-day bills.
The Ministry said that EGP 711.638bn worth of treasury bills were due in January, and the rest will mature between 6 February and 24 December 2024, with weekly re-offering of similar bills.
The report also revealed that the bond balances were EGP 2.291trn in December 2023, including EGP 76.378bn for zero-coupon bonds and EGP 28.502bn for variable-yield bonds.
The Ministry added that EGP 55.599bn worth of bonds were due in January, and the rest will mature between 11 February and 18 January 2037, with weekly re-offering of similar bonds.
Banks operating in Egypt are the main investors in treasury bills and bonds, which the government issues regularly to finance the budget deficit.
These securities are issued through 15 banks in the Primary Dealers System in the primary market and then resold to local and foreign investors in the secondary market.
The Ministry of Finance had previously announced its plan to borrow EGP 1.647trn from the local market in the third quarter of the fiscal year 2023/2024 to cover debt obligations and the budget deficit.
According to the plan, the Ministry aims to issue 52 tenders for treasury bills worth EGP 1.603trn and 28 tenders for bonds worth EGP 44bn from 1 January to the end of March 2024, reflecting the government’s need for short-term liquidity.
A recent report from the Ministry showed a 92% increase in the budget deficit in the first five months of the fiscal year 2023/2024, reaching EGP 652.65bn, compared to EGP 340.52bn in the same period of 2022/2023. This raised the deficit-to-GDP ratio to 5.51%, up from 3.37%.
The report attributed the rise in the deficit to a significant increase in debt interest expenses, which reached EGP 713.41bn in the first four months of 2023/2024, compared to EGP 357.87bn in the same period of 2022/2023. This led to an increase in expenditures to EGP 1.258trn, while revenues rose to EGP 608.96bn.
The Ministry also disclosed the size of Egypt’s foreign bond balances by the end of 2023, which included:
- USD-denominated bonds worth $33.96bn, issued between 11 June 2015 and 28 February 2023, due between 1 March 2024 and 16 February 2061, with interest rates from 3.875% to 10.875% and an average of 7.386%.
- Sukuk worth $1.5bn, with a term of 3 years, maturing on 28 February 2026, with a yield of 10.875%.
- Green bonds worth $750m, with a term of 5 years, maturing on 6 October 2025, with a yield of 5.25%.
- Euro-denominated bonds worth €4bn, issued between 16 April 2018 and 11 April 2019, due between 11 April 2025 and 11 April 2031, with interest rates from 4.75% to 6.375% and an average of 5.477%.
Furthermore, there are bonds denominated in Japanese Yen amounting to approximately JPY 60bn, equivalent to $500m, issued on 31 March 2022, with a term of 5 years, maturing on 31 March 2027, and a yield of 0.85%. Additionally, there are bonds denominated in Chinese Yuan amounting to approximately CNY 3.5bn, equivalent to $500m, issued on 16 October 2023, for a term of 3 years, maturing on 16 October 2026, with a yield of 3.510%.
Egypt successfully launched its second issuance of Samurai bonds in November 2023, totalling JPY 75bn, equivalent to approximately $500m, with a term of 5 years and an annual yield of 1.5%.
