CAIRO: The Ministry of Finance (MOF) intends to borrow 220 billion EGP ($30.7 billion) in treasury bills and bonds during the first Q of the current fiscal year, compared to 204.8 billion EGP in the previous Q that ended June 30.
In its initial schedule for government borrowing, MOF posted Wednesday it would auction 165 billion EGP in treasury bills, and 65 billion EGP in treasury bonds, amid ongoing efforts to fill a soaring budget deficit.
President Abdel Fatah al-Sisi ratified a revised and tightened budget for the 2014/15 fiscal year on Sunday, in a move towards applying tough austerity measures. The deficit was reduced from 292 billion EGP ($40.83 billion) in the initial budget draft to 240 billion EGP which amounts to 10 percent of gross domestic product, compared to an expected 12 percent deficit for the 2013/14 fiscal year that ended Monday.
Since the January 25 Revolution in 2011 that removed Hosni Mubarak, successive governments resorted to increase borrowing from banks operating in Egypt to cover the budget deficit, as revenues from tourism and foreign direct investment were hit by local unrest.
Meanwhile, Cairo is expected to receive generous aid from the Gulf States following Sisi’s landslide victory in the presidential election, and some experts predicted that his inauguration will pave the way for pending aid and grants, especially after talks resume with the International Monetary Fund.
Saudi King Abdullah bin Abdul Aziz called for a donor conference to help boost the Egyptian economy in a congratulatory message to Sisi, although the date of the conference has not been set.
Kuwait and the United Arab Emirates pledged the interim government around $12 billion after the removal of former Islamist president Mohamed Morsi in the wake of the events of June 30 in 2013.