The outstanding balances of treasury bills (T-Bills) and bonds (T-Bonds) owed by the government until the end of July 2019 amounted to EGP 1.97tn, according to the Ministry of Finance.
Banks working in the Egyptian market are considered the largest investors in T-bills and bonds which the government issues on a regular basis to cover the state’s budget deficit.
These government securities are proposed through 15 banks, which are the principal dealers in the primary market. The banks resell a part of these securities in the secondary market to retail investors, as well as to local and foreign institutions.
In a recent report, the ministry pointed out that the total outstanding balances of treasury bills reached about EGP 1.203tn at the end of July 2019, including EGP 109.062bn with maturity of 91 days, EGP 212.144bn for 182 days, EGP 313.762bn for 273 days, and EGP 568.999bn for 364 days.
According to the ministry, these bills are due from 6 August 2019 to 4 August 2020.
As for local T-Bonds, the ministry said they reached EGP 766.36bn at the end of July 2019.
The bonds were issued between 18 January 2005 and 2 July 2019 and are repayable between 12 August 2019 and 7 May 2029.
Interest rates on these bonds range from 11.4% to 18.75%, averaging 15.085%.
In the same context, the ministry revealed an increase of outstanding international bonds to $23.21bn and €4bn.
The maturity of dollar bonds ranges from 5 to 30 years, while maturity of euro-denominated bonds is 8-12 years.
The Finance Ministry had earlier announced its intention to expand in borrowing from the local market to fill the chronic deficit in the state budget significantly during the first quarter of the fiscal year (FY) 2019/20.
The ministry plans to issue EGP 522bn worth T-Bills and T-Bonds from the beginning of July to the end of September 2019, the highest rate of government borrowing through debt instruments since the launch of these instruments on the market.
The state budget deficit is expected to reach EGP 445.1bn at the end of FY 2019/20.
The ministry’s plan reveals that the government targets to issue EGP 490.75bn worth T-Bills and EGP 31.25bn worth T-Bonds.