CAIRO: The Central Bank of Egypt (CBE) on behalf of the Ministry of Finance is set to auction 7 billion EGP ($979.6 million) in treasury bills Thursday, according to the bank’s official website.
The T-bills are scheduled to be offered in two installments: the first valued at 3 billion EGP with a 6-month term, and the second worth 4 billion EGP with a 357-day term.
The government intends to borrow 455 billion EGP during the current fiscal year. This comes amid efforts aimed at filling a soaring budget deficit that amounts to an estimated 14 percent of GDP for FY 2014-2015 before President Abdel Fatah al-Sisi ratified a revised and tightened budget in a move towards applying austerity measures.
In the revised budget, the shortfall was reduced from 292 billion EGP in the initial budget draft to 240 billion EGP, which amounts to 10 percent of GDP compared to a 12 percent of GDP deficit for FY 2013-2014.
Minister of Finance Hani Kadry said previously the budget deficit is expected to grow to 11 percent of GDP this fiscal year, citing the government’s commitment to paying interest on the Suez Canal investment certificates.
In an attempt to control the deficit, the Cabinet in 2014 decided to cut energy subsidies, raising the price of petroleum products from between 40-78 percent for petrol and 175 percent for natural gas overnight.
The government has also mulled new taxes, such as mortgage taxes, a 5 percent tax on those who earn more than 1 million EGP annually and a 10 percent tax on stock market profits and dividends.