Egypt’s Ministry of Finance intends to issue treasury bills (T-bills) and bonds worth total of EGP 182.5bn in September 2021, as part of a larger local debt instruments plan worth EGP 587bn, to cover the budget deficit, during first quarter (Q1) of fiscal year (FY) 2021/22.
According to the plan, the ministry intends to make 16 T-bill offerings worth EGP 126bn, and 15 bond offerings worth EGP 56.5bn.
Moreover, it plans to issue four T-bill offerings for 91-day terms worth EGP 25bn, four offerings for 182-day terms worth EGP 23bn, four offerings for 273-day terms worth EGP 19bn, and four 364-day T-bills worth EGP 59bn.
The government’s plan also includes offering two-year bonds worth EGP 15bn, 3-year bonds worth EGP 18bn, and five-year bonds worth EGP 18bn. The Ministry is also scheduled to offer 7-year bonds worth EGP 4.5bn, and 10-year bonds worth EGP 3.5bn.
The Ministry of Finance is also offering 15-year bonds worth EGP 1bn, in addition to “Zero Coupon” bonds for one and a half years, with a value of EGP 9bn.
Banks operating in the Egyptian market are the largest sectors investing in treasury bonds and bills, which the government periodically offers in order to cover the state’s general budget deficit.
These bonds and bills are offered through 15 major banks that are part of the primary dealers system in the primary market, and those banks resell part of them in the secondary market to individual investors and local and foreign institutions.
Earlier, the Central Bank of Egypt (CBE) revealed that the total outstanding balances of T-bills reached about EGP 1.588trn in June 2021, up from EGP 1.554trn in May 2021.
CBE explained that investments of public sector banks in T-bills amounted to EPG 262.057bn in June, compared to EGP 252.291bn in May, while the investments of private sector banks amounted to EGP 350.546bn, compared to EGP 344.790bn.
The CBE report revealed that the investments of specialized banks in T-bills increased to about EGP 32.948bn in June, compared to EGP 30.468bn in May, while the investments of foreign bank branches amounted to EGP 46.022bn, compared to EGP 46.801bn.
According to CBE, the size of the domestic public debt amounted to about EGP 4.742trn at the end of June 2020, representing about 81.5% of GDP. About 87.8% of the debt is owed by the government, 6% is owed by public economic bodies, and 6.2% is owed by the National Investment Bank.