Egyptian Government eyes borrowing EGP 642.5bn from local market in Q2 2021

Finance Ministry issues 52 tenders for T-bills worth EGP 462bn, 35 bids for bonds worth EGP 180.5bn from April to June end

The Egyptian Government intends to borrow EGP 642.5bn from the local market in the second quarter (Q2) of 2021, figures obtained by Daily News Egypt indicate.
The finance will be gained through Treasury bills (T-bills) and bonds (T-bonds), during Q2 of 2021, which is also Q4 of fiscal year (FY) 2020/21.
According to the government's plan, the Ministry of Finance intends to issue 52 tenders for T-bills worth EGP 462bn, alongside 35 bids for T-bonds worth EGP 180.5bn, from 1 April to the end of June 2021.
The Central Bank of Egypt (CBE), which undertakes this task on behalf of the government, will issue bids in April for T-bills and T-bonds worth EGP 197.5bn. This is in addition to bids worth EGP 198bn in May, and EGP 247bn in June.
According to the plan, 91-day T-bills worth EGP 139.5bn will be offered, in addition to 182-day T-bills worth EGP 133.5bn, 273-day T-bills worth EGP 101bn, and 364-day T-bills worth EGP 88bn.
The government's plan also includes offering two-year T-bonds worth EGP 15bn, three-year T-bonds worth EGP 41bn, and five-year T-bonds worth EGP 44bn. The Ministry of Finance will also offer seven-year T-bonds worth EGP 37.5bn, and 10-year T-bonds worth EGP 37.5bn.
This is in addition to the ministry offering 15-year T-bonds worth EGP 1.5bn, as well as bringing a return to the "Zero Coupon" bond offering, in which three bids are scheduled to be offered at a value of EGP 4bn for 18 months.
Minister of Finance Mohamed Maait had previously revealed that, for the third year in a row, the state budget will continue to achieve an initial surplus of about EGP 14bn.
This has contributed to the reduction of the total budget deficit to 3.6% during the first half (H1) of FY 2020/21, compared to 4.1% during H1 of FY 2019/20.
Ahmed Kuchouk, Deputy Minister of Finance for Financial Policies and Institutional Development, said that the ministry aims to reduce the total deficit to about 7.8%-7.9% of GDP during FY 2020/21 and to 6.6% of GDP during FY 2021/22.
He added that the ministry is also aiming for debt to reach about 89% of GDP by June 2021. This is in addition to targeting a primary surplus of 0.7%-0.9% of GDP in FY 2020/21 and a surplus of 1.5% in FY 2021/22.
Earlier, the CBE revealed that the volume of domestic public debt reached about EGP 4.354trn by the end of December 2019. Of this, 87.8% was due by the Egyptian Government, 5.9% by economic public bodies, and 6.3% by the National Investment Bank (NIB).
Banks operating in the Egyptian market are the largest sectors investing in T-bonds and T-bills, which the government issues periodically to cover the state's general budget deficit.
These vessels are offered through 15 banks that participate in the primary dealers system in the primary market. Participating banks sell part of them in the secondary market, to individual investors and local and foreign institutions.