The Egyptian government intends to rely less on the local market to finance the state’s general budget deficit in the first quarter (Q1) of fiscal year (FY) 2021/22, sources say.
The government aims to borrow only EGP 587 billion in the local market through treasury bills and bonds in the first quarter of fiscal year 2021/22, compared to around EGP 600 billion in the first. quarter of fiscal year 2020/21, 640 billion EGP in the second quarter of 647.5 EGP. billion euros in the third quarter and 644.5 billion EGP in the fourth quarter.
According to the government’s plan, the Ministry of Finance intends to issue 52 offers for treasury bills worth EGP 410 billion and 48 offers for bonds worth EGP 177 billion. , during the period from July to September 2021.
The Central Bank of Egypt (CBE), which is issuing these offers on behalf of the government, will issue offers of EGP 182.5 billion in July, offers of EGP 222 billion in August, and offers of EGP 182.5 billion. billion EGP in September.
According to the plan, the government will issue a 192 billion EGP issue which will mature in 364 days. Other issues as follows: 91-day bills valued at EGP 81 billion, 182-day bills valued at EGP 75 billion and 273-day bills valued at EGP 62 billion.
The ministry also stepped up the supply of short-term bonds significantly during the first quarter of fiscal 2021/22. It is planned to offer two-year bonds worth EGP 45 billion, in addition to zero coupon bonds, with a term of one and a half years, valued at EGP 29.5 billion. ‘EGP.
In addition, the ministry is expected to offer 3-year bonds valued at EGP 18 billion, 5-year bonds valued at EGP 19.5 billion, 7-year bonds valued at EGP of EGP 13.5 billion, 10-year bonds worth EGP 12.5 billion and 15-year bonds worth EGP. 3 billions.
Banks operating in the Egyptian market are the largest investors in treasury bills and bonds, which the government regularly issues to finance the general state budget deficit.
These bonds and bills are offered by 15 banks which participate in the system of primary dealers on the primary market. These banks sell part of it on the secondary market to private investors and to local and foreign institutions.
Earlier last week, CBE revealed that the volume of outstanding treasury bill balances only increased to around EGP 1.554 billion in May 2021, up from around EGP 1.533 billion in April 2021, an increase of about EGP 21 billion.
According to the CBE, investments by public sector banks in treasury bills amounted to around EGP 252.291 billion in May, compared to EGP 285.024 billion in April. Investments by private sector banks in treasury bills amounted to around EGP 344.790 billion, compared to EGP 337.7 billion.
Investments by specialized banks in this sector amounted to EGP 30.468 billion in May, compared to EGP 31.562 billion in April, while investments by branches of foreign banks in Egypt amounted to EGP 46.801 billion in April. May 2021, up from EGP 47.082 billion in April.
According to the CBE, the size of the domestic public debt stood at around EGP 4.742 billion in June 2020, representing around 81.5% of gross domestic product (GDP), of which 87.8% is owed by the government, 6% is owed by the public economic bodies and 6.2% is owed by the National Investment Bank (NIB).
The net balance of domestic debt owed by the government was around EGP 4.163 billion, an increase of around EGP 432.8 billion in fiscal year 2019/20, while the net balance from public economic bodies amounted to EGP 286.4 billion, an increase of EGP 3.5 billion. , and the net debt of the NIB, less the bank’s inter-debts to public economic bodies and the bank’s investments in government securities, reached about EGP 292.1 billion, an increase of 23.7 billion billion EGP.
Ahmed Kojak, deputy finance minister, revealed earlier that the ministry aims to reduce the total deficit of the general state budget to around 7.8-7.9% of GDP in fiscal year 2020/21 and 6.6% of GDP during 2021/22. General debt will also reach around 89% of GDP by June 2021. The ministry targets a primary surplus of 0.7-0.9% of GDP in 2020/21 and a surplus of 1.5% in 2021/22.