Egypt to borrow EGP 633.25bn in debt instruments from local market during Q2 2021/22

Outstanding balance of T-bills declines to about EGP 1.564trn in July 2021

Egypt's Ministry of Finance intends to issue 52 treasury bill (T-bill) offerings worth EGP 467.5bn and 49 bond offerings worth EGP 165.75bn starting from October to December 2021.
It comes as part of the government's plan to borrow EGP 633.25bn from the local market during the second quarter (Q2) of fiscal year (FY) 2021/22, up from EGP 587bn in Q1 2021/22.
The Central Bank of Egypt (CBE), which undertakes the task on behalf of the government, will issue EGP 195.25bn worth T-bill and bond offerings in October, EGP 242.75bn worth offerings in November, and EGP 195.25bn offerings in December.
According to the plan, most T-bill offerings will be for a period of 364 days, as the ministry is scheduled to offer more bids worth EGP 192bn, and EGP 185bn worth bids for a period of 273 days. Other offers will include 91-day T-bills with a value of EGP 48.5bn, and 182-day bills worth EGP 42bn.
The Ministry will also intensify the offering of short-term bonds significantly during Q2 2021/22, where it is scheduled to offer two-year bonds worth EGP 53bn, in addition to offering "Zero Coupon" bonds, for a period of one and a half years, at a value of EGP 35.5bn.
It is also scheduled to offer 3-year bonds worth EGP 58.5bn, 5-year bonds worth EGP 7.75bn, 7-year bonds worth EGP 5.25bn, 10-year bonds worth EGP 4.25bn, and 15-year bonds worth EGP 1.5bn.
Banks operating in the Egyptian market are the largest sectors investing in bonds and T-bills, which the government regularly issues to cover the state's general budget deficit.
These debt instruments are offered through 15 banks that participate in the primary dealers system in the primary market, and these banks resell part of them in the secondary market to individual investors and local and foreign institutions.
A recent report by CBE revealed a decline in the total volume of outstanding balance of T-bills to about EGP 1.564trn in July, compared to about EGP 1.588trn in June 2021.
Public sector banks' investments in T-bills recorded about EGP 257.920bn in July, compared to about EGP 262.057bn in June.
The investments of banks specialized in treasury bills recorded EGP 37.062bn in July 2021, compared to EGP 32.948bn in June.
Private sector banks' investments amounted to EGP 323.186bn in July, compared to about EGP 350.546bn in June.
The investments of foreign bank branches recorded EGP 45.749bn in July, compared to EGP 46.022bn in June.
According to CBE, the volume of the domestic public debt amounted to about EGP 4.742trn in June 2020, representing about 81.5% of the gross domestic product, of which 87.8% is owed by the government, 6% is owed by public economic bodies, and 6.2% is owed by the National Investment Bank (NIB).
The net balance of domestic debt owed by the government amounted to about EGP 4.163trn, an increase of about EGP 432.8bn during FY 2019/20, while the net balance of public economic bodies amounted to EGP 286.4bn, an increase of EGP 3.5bn, and NIB's net debt, minus the bank's indebtedness for public economic bodies and the bank's investments in government securities bills and bonds, amounted to about EGP 292.1bn, an increase of EGP 23.7bn.