Egyptian Ministry of Finance plans to launch 35 treasury bill and bond offerings worth EGP 315.5 billion in August

The Ministry of Finance intends to offer 35 treasury bill and bond offerings worth EGP 315.5 billion in August as part of a government plan to borrow EGP 818 billion on the local market during the first quarter (1Q) of the 2022/23 financial year.

According to the government’s plan, the Ministry of Finance intends to issue 20 bond tenders worth EGP 264 billion and 15 bond tenders worth EGP 51.5 billion. of EGP.

The Central Bank of Egypt (CBE) – which will undertake this task on behalf of the government – will launch in August five offers for 91-day bills worth EGP 72 billion, five for 182-day bills of worth EGP 74 billion, five more for 273-day bills worth EGP 38.5 billion and an additional set of 364-day bills worth EGP 79.5 billion .

The plan also includes the offering of five zero-coupon bonds with a duration of one and a half years worth EGP 36 billion, three offerings of three-year bonds worth 11.5 billion EGP and two five-year deals worth EGP 2 billion.

The ministry is also offering three offerings of seven-year bonds worth EGP 1.5 billion and two 10-year bonds worth EGP 500 million.

Banks operating in the Egyptian market are the largest sectors investing in bonds and treasury bills, which the government periodically offers to cover the general state budget deficit.

These bonds and notes are offered through 15 banks that participate in the primary dealer system in the primary market, and these banks resell some of them in the secondary market to individual investors and local and foreign institutions.

It should be noted that the ministry revealed that the volume of outstanding balances of local treasury bills and bonds stood at around EGP 3.83 trillion at the end of May 2022.

According to the latest report published by the ministry on its website, the volume of outstanding treasury bill balances up to the end of May amounted to approximately EGP 1,374 billion broken down into EGP 858.77 billion. EGP in 364-day bills, EGP 313.88 billion in 273-day bills and EGP 115.252 billion in 182-day bills, in addition to EGP 86.627 billion in 91-day bills.

According to the ministry, bids for bills amounting to around EGP 81.8613 billion were due in June, while the rest of the existing bids are due during the rest of the current year until 30 May 2023, taking into account that other invoices with the same deadlines are reissued on a periodic weekly basis.

This comes as the Ministry of Finance revealed that the volume of outstanding balances of treasury bills reached around EGP 2.455 trillion at the end of May 2022, of which around EGP 217.027 billion are zero-coupon bonds.

In addition, bonds worth EGP 54.586 billion matured in June, while the rest of the bonds will mature from August 11 to January 18, 2037, taking into account that other offers of Bonds are reissued on a periodic weekly basis, just like bonds.

Finance Minister Mohamed Maait has indicated in his recent statements that the general state budget for the financial year 2022/23 exceeds EGP 3 trillion, pointing out that its total expenditure reaches around EGP 2,071 trillion. , while the estimated total revenue is around EGP 1.518 trillion.

Maait also said that the government aims in the new financial year to achieve a primary surplus of EGP 132 billion at a rate of 1.5% and to reduce the total deficit to 6.1% of GDP, against a total deficit 12.5% ​​at the end. of June 2016.

Furthermore, it wants to place the debt rate on a lasting downward trajectory and bring it down to 84% of GDP, against 103% at the end of June 2016, and bring the debt service ratio down to 7.6% of GDP, against 10%.

Finally, the government is seeking to reduce budgetary expenditure to 33.3%, compared to 40% over the past three years, and to diversify the sources of financing to reduce the cost of development and extend the life of the debt.

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