CAIRO: The Ministry of Finance is expected to auction 79 billion EGP in treasury bills and bonds during April, including 55 billion EGP treasury bills and 24 billion EGP in treasury bonds, according the MOF schedule of government securities released Wednesday.
The bills are scheduled to be auctioned with three, six, nine and 12-month terms valued at 10 billion EGP, 12.5 billion EGP, 15 billion EGP and 17.5 billion EGP respectively. The MOF will auction treasury bonds with three-year terms at 7 billion EGP and another installment with a five-year term at 4 billion EGP.
Other long term treasury bonds are scheduled to be auctioned with seven-year, 10-year and 18-month terms valued at 6 billion EGP, 4 billion EGP and 3 billion EGP respectively.
The government plans to borrow 205 billion EGP in treasury bills and bonds during the 4th quarter of the current fiscal year (2013/2014), the MOF announced in late March.
Treasury bonds represent 30 percent of the total auctions, said the MOF, noting that this proportion compromises with the adopted Public Debt Strategy.
Egypt has faced dramatic economic troubles since the ouster of former President Hosni Mubarak in the wake of the January 25 Revolution, registering a budget deficit over 240 billion EGP during the previous fiscal year (2012/2013).
MOF on behalf of the Government resorts to borrowing form bank operating in Egypt to cover the budget deficit which is expected to range between 11 to 12 percent, 200 billion EGP, by the end of the current fiscal year 2013-2014, according to Minister of Finance Hany Kadry.
However, businessmen complain of hardship in getting loans to finance their projects and investments amid government’s growing borrowing from banks triggered by the economic turmoil which followed the January 25 Revolution in 2011.
In turn, banks tend to lend the government which they consider as a safe haven with guarantees of repayment on time and higher interest rate than retail lending.
Egypt’s budget deficit is currently funded by CBE treasury bills and bonds, one of the governmental instruments for debts, as well as aid from Gulf States and international loans.
Prime Minister Ibrahim Mahlab said the government aims to reduce the budget deficit by 10 percent, by boosting production rates as well as tourism revenues, Youm7 reported in March.