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Finance Ministry to offer EGP 185bn worth T-bills, bonds in July - Daily News Egypt

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Finance Ministry to offer EGP 185bn worth T-bills, bonds in July

Move is to fill chronic budget deficit during Q1 of FY 2020/21

The Ministry of Finance will, on Sunday, start implementing a plan aimed at offering treasury bills (T-bills) and bonds worth EGP 185bn during July.

Figures obtained by Daily News Egypt last week revealed the government’s intention to borrow EGP 600bn from the local market, through T-bills and bonds. The move is to fill the chronic deficit in the state budget during the first quarter (Q1) of the new fiscal year (FY) 2020/21. According to the government’s plan, the ministry plans to issue 52 T-bills at a value of EGP 499.5bn, and issue 32 T-bonds bids at a value of EGP 100.5bn.

Minister of Finance Mohamed Maait had expected the public budget deficit to rise to 7.8% as part of FY 2020/21 budget targets, compared to about 6.3% in the basic scenario.

Debt-to-GDP ratio may reach 88%, compared to about 83% in the basic budget. This would occur in case of repercussions due to the novel coronavirus (COVID-19) persisting until the end of 2020, according to a previous Ministry of Finance statement.

The Central Bank of Egypt (CBE), which handles the task on the government’s behalf, is offering 16 T-bills worth EGP 154bn, and 10 T-bonds bids worth EGP 31bn, this month.

A total of four bids worth EGP 33bn will also be launched in July for 91-day term, besides four T-bill bids for 182 days worth EGP 37bn. This will come alongside four bids for 273 days worth EGP 41bn, and the same for 364 days with a value of EGP 43bn.

The government’s plan also includes offering two-year bonds worth EGP 1bn, two-year bonds of EGP 8.5bn, and two-year bonds worth EGP 7.5bn.

The Ministry of Finance is also scheduled to launch seven-year bonds with a value of EGP 6.5bn in July, alongside other two-year bids of EGP 6.5bn.

The ministry has introduced new bonds for 15 years, and is scheduled to offer in July the first bid of those bonds with a value of EGP 1bn. This represents the first time that government bonds have been launched on the local market for this period.

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