The Central Bank of Egypt announced on Sunday that the country intends to issue $1 billion in dollar-denominated Treasury bills with a one-year maturity on Monday, with settlement scheduled for the following day.
The new Treasury bills will replace maturing dollar-denominated debt worth $1.06 billion, which carried an average yield of 5.149%.
Egypt is actively seeking financing at present, as the country’s foreign debt obligations are expected to reach approximately $13 billion during the first half of this year.
Egypt’s Treasury Bills and Recent Debt Issuances
Last week, Egypt raised $2 billion from an international bond issuance, with demand reaching nearly $10 billion. The issuance was divided into two tranches, one valued at $1.25 billion for a five-year term, yielding 8.625%, which was lower than the initial price target of 9.25%.
Additionally, Egypt secured €1 billion in funding from the European Union and a $2 billion loan from various international institutions at the end of 2024, after repaying a $3 billion loan.
Influx of Foreign Investment and Future Challenges
As the anniversary of the Central Bank of Egypt’s decisions in March 2024 approaches—including the devaluation of the pound and a 600 basis point hike in interest rates—there was a notable influx of “hot money” into Egypt in March and April of the previous year. This contributed to a rise in foreign investments in local debt instruments, totaling $24 billion, much of which was in one-year Treasury bills.
However, according to international institutions’ recommendations, part of this capital may exit the country next month. As a result, Egypt is preparing to secure a significant portion of its financing needs to mitigate any potential instability, particularly regarding its currency exchange rate and the availability of foreign currency.
