Egypt: Government to borrow funds from local market in Q4 FY 2024

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The Egyptian government plans to secure a substantial loan of EGP 1.491trn from the domestic market in the fourth quarter of the fiscal year 2023/2024. This move is aimed at addressing the maturities of existing debt instruments and funding the state’s general budget deficit.

In line with this strategy, the Ministry of Finance is set to issue a total of 84 bond tenders, with 52 tenders valued at EGP 1.380trn and an additional 32 tenders worth EGP 111.5bn. These tenders will be spread out from the beginning of April to the end of June 2024.

For April, the Central Bank of Egypt (CBE) is expected to release treasury bills and bonds totalling EGP 616.5bn. This will be followed by EGP 457bn worth of bids in May and EGP 418bn in June.

The Ministry’s schedule includes the issuance of tenders valued at EGP 400bn for 91 days, EGP 355bn for 182 days, and EGP 340bn for 273 days. Additionally, there are plans to offer 364-day bills amounting to EGP 285bn at a later date.

Furthermore, the offering will include 546-day Zero Coupon bonds worth EGP 65bn, three-year bonds valued at EGP 43bn, and five-year bonds totalling EGP 3.5bn.

It’s noteworthy that as of January 2024, the Ministry of Finance reported the outstanding balances of local treasury bills and bonds to be approximately EGP 4.966trn. The treasury bills accounted for about EGP 2.734trn, while the treasury bonds were around EGP 2.232trn.

The majority of investments in these treasury bonds and bills come from banks within the Egyptian market. These banks are part of the 15 institutions that operate under the “primary dealers” system in the primary market. They also have the option to resell a portion of the bonds and bills in the secondary market to individual investors, as well as local and foreign organizations.