The Egyptian government intends to borrow EGP 640bn from the local market over the next three months, through the issuance of T-bills (T-bills) and bonds (T-bonds).
The intended issuance is designed to fill the chronic deficit in the state budget during the second quarter (Q2) of fiscal year (FY) 2020/2021.
According to the government’s plan, the Ministry of Finance will issue 52 bids for T-bills worth EGP 514bn, and 32 T-bonds bids worth EGP 126bn.
The Central Bank of Egypt (CBE), which will undertake the issuance on behalf of the government, will present bids for T-bills and T-bonds worth EGP 197bn in October. It will then go on to issue bids worth EGP 196.5bn in November, and EGP 246.5bn in December.
According to the plan, 91-day T-bills worth EGP 107.5bn will be offered, alongside 182-day T-bills worth EGP 114bn, 273-day T-bills worth EGP 139.5bn, and 364-day T-bills worth EGP 153bn.
The government’s plan also includes offering two-year T-bonds worth EGP 8bn, three-year T-bonds worth EGP 24.5bn, and five-year T-bonds worth EGP 38.5bn.
The Ministry of Finance will also offer seven-year T-bonds worth EGP 25.5bn, and 10-year T-bonds worth EGP 26.5bn.
It is also offering new 15-year T-bonds worth EGP 3bn, the second time that government bonds have been offered in the local market for this term.
A few days ago, the CBE revealed that Egypt’s domestic public debt reached a volume of about EGP 4,354trn by the end of December 2019. Of this amount, 87.8% was owed by the government, 5.9% by economic public bodies, and 6.3% by the National Investment Bank (NIB).
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 vessels are offered through 15 banks that participate in the primary dealers system in the primary market, and which sell part of them on the secondary market to individual investors and local and foreign institutions.