Egypt’s FinMin to Offer 200 Bln T-bills, Bonds in 3 Months

Egypt’s Ministry of Finance intends to raise treasury bills and bonds worth EGP 200 billion during the first quarter of 2013/14 fiscal year, compared to EGP 169.29 billion , which were the volume of the issued t-bills and bonds in the corresponding time last FY.

Ministry of Finance, via its official website, mentioned that it aims to offer short and medium term treasury bills worth EGP 160 billion, whereas the t-bills will be divided into four auctions; EGP 26 billon (91- day), EGP 35 billon (182- day), EGP 47 billon (273- day), and EGP 52 billon (364- day).

Moreover, Ministry of finance intends to offer 3-, 5-, 7- and 10-year treasury bonds worth 13, 6, 6.5 and 8.5 billion respectively. In addition to auctioning zero-coupon bond at value of EGP 6 billion.

Ministry of finance declared that the issuance volume recorded EGP 81.5 billion in July, EGP 60 billion in August and EGP 58.5 billion in September.

Ministry of Finance resorts to offer t-bills and bonds so as to fulfill previous entitlements in addition to confronting the exacerbated budget deficit as it surged to EGP 504.9 billion, during the period from July to May 2012/13, seizing 11.8% of the gross domestic product.

The State’s General budget for FY 2012/2013 states that the budget deficit jumps to EGP 197 billion and raises over EGP 300 billion fueled by the failure  in implementing the economic reform plan. The State budged confirmed that the government is striving to face the financial imbalances through re-prioritizing the public expenditures, so as to implement social justice, in addition to reducing the   percentage of the budget deficit and public debt in the GDP until it  reach low rates in order to  resort the confidence in the financial sustainability of the Egyptian economy.

It is worth mentioning that the weighted average of treasury bills and bonds surged to 1.4 year in March 2013, compared to 1.3 year in the corresponding time last year. The average interest rate on the debt balance reached 13.26%.

The domestic dept has increased because the government is bridging the financial gap through increasing the issuance of t-bills and bonds; noting that the domestic dept surged to EGP 1387 billion in March 2013. Noting that t-bills and bonds’ balance reached EGP 459.4 and 312.8 billion respectively.

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