The Ministry of Finance intends to issue treasury bills (T-bills) and bonds of EGP 610bn from 1 April to 30 June, according to figures obtained by Daily News Egypt.
The move comes as part of government efforts to broaden the borrowing process from the local market and fill the state budget’s chronic deficit. The largest share of government borrowing comes from debt instruments.
It is expected that the budget deficit will reach about EGP 445.1bn by the end of the fiscal year (FY) 2019/20.
The Ministry of Finance’s plan reveals that the government is aiming to issue 52 treasury bills, at a value of EGP 522bn, and 26 treasury bonds, worth EGP 88bn.
In April, the Central Bank of Egypt (CBE) will launch tenders for treasury bonds and bills worth EGP 186bn, and bids worth EGP 238bn in June.
According to the plan, 91-day treasury bills worth EGP 113.5bn will be launched, in addition to 182-day bills worth EGP 131bn, alongside 273-day bills worth EGP 137.5bn, and 364-day bills worth EGP 140bn.
The government’s plan also includes offering 3-year bonds, due in March 2023, at a value of EGP 22.5bn, and other 5-year bonds, due in March 2025, at a value of EGP 24.5bn.
The Finance Ministry also offers 7-year bonds, due in March 2027 and worth EGP 19.5bn, and 10-year bonds due in March 2030 worth EGP 21.5bn.
The banks operating in the Egyptian market are the largest sectors investing in treasury bonds and bills that the government offers periodically to cover the state’s public budget deficit.
These bonds and bills are offered through 15 banks that participate in the system of “primary dealers” in the “primary market”. Those banks resell part of them on the “secondary market” to investors, including individuals and local and foreign corporations.