Egypt's Ministry of Finance has revealed its intention to issue Treasury bills (T-bills) and Treasury bonds (T-bonds) worth EGP 222bn in August. The move comes as part of a larger plan that includes offering local debt instruments worth EGP 587bn to bridge the budget deficit, during the first quarter (Q1) of fiscal year (FY) 2021/22. According to the financial plan, the ministry intends to issue 20 T-bill tenders worth EGP 158bn, alongside 19 T-bond tenders worth EGP 64bn. The plan includes: five bids for 91-day T-bills worth EGP 31bn; five bids for 182-day T-bills worth EGP 29bn; five bids for 273-day T-bills worth EGP 24bn; and five other bids for 364 days worth EGP 74bn. The government's plan also includes offering: two-year T-bonds worth EGP 15bn; three-year T-bonds worth EGP 18bn; and five-year T-bonds worth EGP 8.5bn. The Ministry of Finance is also scheduled to offer seven-year T-bonds worth EGP 4.5bn, and 10-year T-bonds worth EGP 5.5bn. This is alongside the intention to offer 15-year T-bonds worth EGP 1bn, along with Zero Coupon T-bonds for 1.5 years, worth EGP 11.5bn. Banks operating in the Egyptian market represent the largest sector investing in T-bonds and T-bills, which the government periodically offers to cover the state's general budget deficit. These T-bonds and T-bills are offered through 15 banks that participate in the primary dealers system in the primary market. Those banks resell part of them in the secondary market to individual investors and local and foreign institutions. Earlier, the Central Bank of Egypt (CBE) revealed that the volume of outstanding balances of treasury T-bills only rose to about EGP 1.554trn at the end of May 2021. This compared to about EGP 1.533trn at the end of April 2021, an increase of about EGP 21bn. According to the CBE, the investments made by public sector banks in T-bills amounted to about EGP 252.291bn at the end of May, compared to EGP 285.024bn at the end of April. Meanwhile, the investments of private sector banks amounted to about EGP 344.79bn, compared to EGP 337.7bn. Investments made by specialised banks amounted to EGP 30.468bn at the end of May, compared to EGP 31.562bn at the end of April. Meanwhile, the investments of foreign bank branches amounted to EGP 46.801bn at the end of May 2021, compared to EGP 47.082bn. According to the CBE, the size of the domestic public debt amounted to about EGP 4.742trn at the end of June 2020, representing about 81.5% of the gross domestic product (GDP). Of this amount, 87.8% is owed by the Egyptian Government, 6% is owed by public economic bodies, and 6.2% is owed by the National Investment Bank (NIB).
