Egypt’s Senate to discuss new low on sovereign bonds

The new law was drafted to allow Ministry of Finance to issue sovereign bonds (Sukuk) to raise capital necessary for spending on economic and investment projects

  
An employee counts Egyptian pounds in a foreign exchange office in central Cairo, Egypt, November 3, 2016. Image used for illustrative purpose.

An employee counts Egyptian pounds in a foreign exchange office in central Cairo, Egypt, November 3, 2016. Image used for illustrative purpose.

REUTERS/Mohamed Abd El Ghany

ArabFinance: Egypt’s Senate is set to discuss a new government-drafted law on Sovereign Bonds (Sukuk) on Monday, May 17th, Ahram Online reported on May 16th.

A report prepared by the Senate's economic and financial affairs committee said the 24-article bill aims to contribute to improving the state's financial performance.

It also eyes achieving the short and long-term objectives of covering the budget deficit.

"This comes through cutting the debt servicing bill, creating new tools for covering the budget deficit, diversifying sources of finance, and stimulating demand on government-issued financial securities," the report highlighted.

The new law was drafted to allow the Ministry of Finance to issue sovereign bonds (Sukuk) to raise capital necessary for spending on economic and investment projects targeted by the state budget and development plan.

"The sovereign bonds (Sukuk) is a new kind of government financial securities that go in line with Islamic sharia and aims to attract Egyptian and foreign investors who abstain from investing in traditional financial and debt servicing securities currently on the market," the report said.

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