Government to borrow EGP 600bn through debt instruments in 3 months

Government to borrow EGP 600bn through debt instruments in 3 months

The government intends to borrow EGP 600bn from the local market through Treasury bills (T-bills) and bonds (T-bonds), Daily News Egypt has learned. The borrowing will occur in the next three months, during the first quarter (Q1) of fiscal year (FY) 2020/2021, and will fill the chronic deficit in the state's budget.

Minister of Finance Mohamed Maait had expected for the public budget deficit to rise to 7.8% for the FY 2020/2021 budget targets, compared to about 6.3% in the basic budget scenario.

The minister also noted that debt, as a percentage of GDP, may reach 88%, compared to 83% in the same context. This would occur in the event that the repercussions of the novel coronavirus (COVID-19) pandemic continue to the end of 2020.

Under the Egyptian government's plan, the Ministry of Finance plans to issue 52 T-bill tenders worth EGP 499.5bn and 32 T-bond tenders worth EGP 100.5bn.

The Central Bank of Egypt (CBE), which handles the task on the government's behalf, will offer T-bills and T-bonds worth EGP 185bn in July. This will follow by a total of EGP 185.25bn offered in August, and EGP 29.75bn in September.

According to the plan, 91-day T-bills worth EGP 107bn are scheduled, 182-day T-bills