CAIRO: The Central Bank of Egypt (CBE) decided to suspend the Monetary Policy Committee (MPC) meeting to consider interest rates scheduled for Thursday, to mark Sinai Liberation Day on April 25, to next Monday, in addition to auctioning 6 billion EGP in treasury bills Wednesday, according to CBE’s official website.
The bills are scheduled to be offered in two installments; one valued at 2.5 billion EGP with a six-month term, and the second worth 3.5 billion EGP with a one-year term, according CBE’s schedule released on its official website.
CBE decided to suspend work in all banks operating in the Egyptian market for three days this week, Sunday and Monday, marking Easter and Sham el-Nessim celebrations, and Thursday for Sinai Liberation Day, Youm7 reported.
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 of over 240 billion EGP during the previous fiscal year (2012/13).
The Ministry of Finance, on behalf of the government, has resorted to borrowing from banks operating in Egypt to cover the budget deficit, which is expected to range between 11 to 12 percent, at 200 billion EGP, by the end of the current fiscal year 2013/14, according to Minister of Finance Hany Kadry.
Further, the government plans to borrow 205 billion EGP in treasury bills and bonds during the 4th quarter of the current fiscal year (2013/2014), including 79 billion EGP in April, according the ministry’s schedule of government securities.
However, businessmen have complained of difficulty in getting loans to finance their projects and investments amid the government’s borrowing trends from banks triggered by the economic turmoil which followed the January 25 Revolution.
Banks prefer to lend the government, which they consider as a safe haven with guarantees of timely repayment and higher interest rate than retail lending.
Egypt’s budget deficit is currently funded by CBE treasury bills and bonds, one of the government’s instruments for debt, as well as aid from Gulf States and international loans.
Additional reporting by Ahmed Yacoub.