On Tuesday, the Central Bank of Egypt (CBE) held an auction for treasury bills and bonds worth EGP 86.25 billion ($2.8 billion) as per the bank’s website.
The auction included four issuances of treasury bills worth EGP 82 billion, with the first issuance valued at EGP 18.5 billion and maturing on 13 December 2024.
The second issuance is worth EGP 23.5 billion and matures on 13 August 2024, while the third issuance has a value of EGP 22.5 billion and matures on 14 November 2023.
The fourth issuance is valued at EGP 17.5 billion and matures on 14 May 2024. Additionally, the CBE auctioned two issuances of EGP 4.25 billion treasury bonds in local currency, with the first issuance worth EGP 4 billion and maturing on 11 July 2026, and the second worth EGP 250 million and maturing on 13 October 2027.
The CBE usually issues treasury bills and bonds on behalf of the Ministry of Finance to finance the country’s budget deficit.
According to Minister of Finance Mohamed Maait, the budget deficit accounted for six percent of Egypt’s GDP in the FY2022/2023, and the country’s debt-to-GDP ratio was estimated at 95.6 percent for FY2022/2023. GDP stood at EGP 9.8 trillion ($318.23 billion) in FY2022/2023.
In FY2023/2024, which began on 1 July, the government increased its budget deficit estimate to 6.9 percent of GDP. As per the latest data from the CBE, Egypt’s gross domestic debt reached EGP 4.74 trillion ($153.3 billion) in June 2020, and more up-to-date figures showed that the country’s external debt increased by 5.1 percent in Q4 of 2022.
Egypt is currently facing a shortage of US dollar liquidity in the local market and a financing gap estimated at $17 billion through 2026.
Moreover, the country has been increasing its efforts to fulfill its commitments to the IMF under the Extended Fund Facility (EFF) loan program, which was approved in December 2022. Under the agreement, the government aims to decrease the gross debt-to-GDP ratio to approximately 83 percent by FY2026/27.
