Egyptian government to borrow EGP 634bn in 4Q of FY2021/22

The Ministry of Finance aims to offer 52 bill bids worth EGP 555.5bn and 35 bond bids worth EGP 78.5bn from 1 April to the end of June 2022.

Figures obtained by Daily News Egypt revealed the Egyptian government's intention to borrow EGP 634bn from the local market during the last quarter (4Q) of FY2021/22.
According to the government's plan, the Ministry of Finance intends to issue 52 bids for treasury bills worth EGP 555.5bn and 35 bids for treasury bonds worth EGP 78.5bn during the period from 1 April to the end of June 2022.
The Central Bank of Egypt (CBE) — which will undertake this task on behalf of the government — will issue in April bids for bills and treasury bonds worth EGP 194bn, bids worth EGP 244bn in May, and bids worth EGP 196bn in June.
According to the plan, most of the issuances of treasury bills will be for short-term bids, as the ministry is scheduled to issue bids worth EGP 175bn for a term of 91 days, EGP 159.5bn for a term of 182 days, and EGP 123bn for a term of 273 days. It is also scheduled to issue 364-day-long bills worth EGP 98bn.
The finance ministry also intensified the offering of short-term bonds significantly during 4Q of FY2021/22, where it is scheduled to issue 'Zero Coupon' bonds for a period of one and a half years at a value of EGP 61.5bn.
It is also scheduled to offer three-year bonds worth EGP 6.75bn, five-year bonds worth EGP 6bn, seven-year bonds worth EGP 2.5bn, and 10-year bonds worth EGP 1.75bn.
The banks operating in the Egyptian market are the largest sectors investing in bonds and treasury bills, which the government periodically offers to cover the state's general budget deficit.
These bonds and bills are offered through 15 banks that participate in the primary dealers system in the primary market, which resell part of them in the secondary market to individual investors and local and foreign institutions.
In the same context, the ministry revealed that the volume of outstanding balances of domestic treasury bills and bonds reached about EGP 3.901 trillion until the end of February 2022.
According to the latest report published by the ministry on its website, the volume of outstanding balances of treasury bills until the end of last February was about EGP 1.462 trillion, with EGP 938.332bn in 364-day bills, EGP 362.595bn in 273-day bills, and EGP 114.437bn in 182-day bills, in addition to EGP 47.475bn in 91-day bills.
According to the finance ministry, bids for bills amounting to about EGP 138.1bn were due during the month of March, while the rest of the existing bids will be due throughout the remainder of the current year until 21 February 2023, taking into account that other bills with the same maturities are re-issued on a periodic weekly basis.
This comes as the ministry revealed that the volume of outstanding balances of treasury bonds reached approximately EGP 2.439 trillion by the end of February 2022, of which about EGP 189.477bn are Zero Coupon bonds.
According to the Ministry of Finance, these bonds are due from 3 April until 18 January 2037, taking into account that other bond bids are re-issued on a periodic weekly basis, just like the bills.
The ministry started offering these bonds from 3 April 2012 to 18 January 2022, and the average return rate on them reached 14.706%, while the average coupon price on Zero Coupon bonds reached 13.687%.