Government to bid for 7B EGP Thursday
Central Bank of Egypt -YOUM7 (Archive)

CAIRO: The Central Bank of Egypt (CBE) is set to auction 7 billion EGP ($978.9 million) in treasury bills Thursday, amid ongoing efforts to fill a soaring budget deficit, according to CBE’s official website.

The bills are scheduled to be offered in two installments, the first valued at 3 billion EGP with a six-month term and the second worth 4 billion EGP with a 357-day term.

Earlier this month, the Ministry of Finance (MOF) declared that it intends to borrow 220 billion EGP ($30.7 billion) in treasury bills and bonds during the first quarter of the current fiscal year, compared to 204.8 billion EGP in the 4th quarter of the last fiscal year that ended June 30.

President Abdel Fatah al-Sisi ratified a revised and tightened budget for the 2014/15 fiscal year, 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.

In an attempt to control the deficit, the Cabinet decided to cut energy subsidies, raising prices of petroleum products ranging from 40 percent to 78 percent for petrol and 175 percent for natural gas.

The government has also mulled new taxes like the mortgage taxes, the 5 percent tax on those who earn more than 1 million EGP annually, in addition to a 10 percent tax on stock market profits and dividends.

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