Egypt’s finance ministry has revealed plans to issue EGP 195.25 billion treasury bills and bonds in October 2021, as part of a larger plan that includes the offering of local debt instruments worth EGP 633.28 billion to cover the budget deficit, in the second quarter (T2) of fiscal year (FY) 2021/22.
According to the ministry, it intends to issue 16 treasury bill issues worth EGP 144 billion and 15 bond issues worth EGP 51.25 billion.
According to the plan, the Treasury bill issue consists of 4 offers worth EGP 15 billion for 91 days, 4 offers worth EGP 13 billion for 182 days, 4 offers worth 57 billion EGP for 273 days and 4 offers worth 59 billion EGP for 364 days.
The government’s plan also includes offering 2-year bonds worth EGP 15 billion, 3-year bonds worth EGP 19.5 billion and five-year bonds. years worth EGP 2.25 billion. The finance ministry is also expected to offer 7-year bonds worth EGP 1.75 billion and 10-year bonds worth EGP 1.25 billion. It also offers 15-year bonds valued at EGP 500 million and 1.5-year zero coupon bonds valued at EGP 11 billion.
Banks operating in the Egyptian market are the largest investors in bonds and treasury bills. The offers are issued through 15 banks that participate in the primary dealer system on the primary market, and these banks resell part of them on the secondary market to individual investors and to local and foreign institutions.
A recent report by the Central Bank of Egypt (CBE) revealed a decline in the total volume of the treasury bill balance to around EGP 1.564 billion in July 2021, from around EGP 1.588 billion in June.
Investments by public sector banks in treasury bills reached about EGP 257.920 billion in July, compared to about EGP 262.057 billion in June.
He added that investments by banks specializing in treasury bills reached EGP 37.062 billion in July, compared to EGP 32.948 billion in June. Investments by private sector banks amounted to EGP 323.186 billion in July, up from around EGP 350.546 billion in June. Investments by foreign banks in local debt securities reached EGP 45.749 billion in July, compared to EGP 46.022 billion in June.
According to the CBE, the size of the domestic public debt stood at around EGP 4.742 billion in June 2020, accounting for around 81.5% of the gross domestic product, of which 87.8% is owed by the government, 6% is owed by public economic bodies, and 6.2% is owed by the National Investment Bank (NIB).
The CBE explained that the net balance of domestic debt owed by the government was about EGP 4.163 billion, an increase of about EGP 432.8 billion in fiscal year 2019/2020, while the net balance of the economic public bodies was EGP 286.4 billion, an increase of EGP 3.5 billion, and the net debt of the NIB, minus the bank indebtedness to the bodies economic and the bank’s investment in government securities, reached about EGP 292.1 billion, an increase of EGP 23.7 billion.