Egypt’s Ministry of Finance will start implementing a plan, on Thursday, to issue treasury bills (T-bills) and bonds (T-bonds) worth EGP 229.75bn during September.
Figures obtained by Daily News Egypt reveal that the government intends to borrow EGP 600bn from the local market, through T-bills and bonds. The investment will fill the chronic deficit in the state budget, during the first quarter (Q1) of fiscal year (FY) 2020/21.
The Central Bank of Egypt (CBE), which will undertake the task of offering the bids on behalf of the government, and will present 20 T-bills worth EGP 191.5bn in September, alongside 12 T-bonds bids worth EGP 38.25bn.
A total of four bids will also be launched in September for 91-day bills worth EGP 41bn, alongside four bids for 182-day bills worth EGP 46bn. There will be an additional four bids for 273-day bills worth EGP 51bn, and four bids for 364-day bills worth EGP 53bn launched during the month.
The government’s plan also includes a bid for two-year bonds worth EGP 1.25bn, three bids for three-year bonds worth EGP 12.5bn, and two five-year bids worth EGP 7.5bn. The Ministry of Finance is set to issue an additional three bids for seven-year bonds worth EGP 9.5bn, and two 10-year bonds worth EGP 6.5bn.
In June, the Ministry of Finance introduced new 15-year bonds, with September set to be the third time that bonds of this time period have been offered in the local market. This will see the ministry launch the bid on these bonds at a total value of EGP 1bn.
Banks operating in the Egyptian market represent the largest sector investing in T-bonds and T-bills, which the government issues periodically to cover the state’s general budget deficit.
These bonds and bills are offered through 15 banks that participate in the primary dealers system in the primary market. They sell part of them on the secondary market to individual investors and local and foreign institutions.