CBE issues LE 1.2B in T-bonds Monday
The T-bonds were offered in two installments, with the first valued at LE 750 million with a five-year term and the second worth LE 500 million with a 10-year term.
The Ministry of Finance announced earlier that it would auction treasury bills and bonds at a total value of LE 181.5 billion during January.
CAIRO - 2 January 2019: The Ministry of Finance will auction treasury bills and bonds at a total value of EGP 181.5 billion during January. In a statement released Tuesday, the ministry said 91-day and 182-day T-bills worth EGP 42.5 and 43.75 billion, respectively, will be auctioned in January.
During December's meeting, the Monetary Policy Committee of the Central Bank of Egypt (CBE) kept the overnight deposit rate and the overnight lending rate at 16.75 percent and 17.75 percent, respectively, during December’s meeting for the sixth time this year.
CAIRO - 27 December 2018: The Monetary Policy Committee of the Central Bank of Egypt (CBE) kept the overnight deposit rate and the overnight lending rate at 16.75 percent and 17.75 percent, respectively, during December's meeting for the sixth time this year.
Egypt has lately conducted modifications on the bonds market started by modifying the treasury bills and bonds treatments, and followed by allowing companies to offer short-term bonds.
During December, The Financial Regulatory Authority (FRA) issued a decree allowing companies to offer and issue short-term bonds.
According to the decree, these companies included joint stock companies and shareholding companies, as well as companies authorized to engage in a non-bank financial activity after getting the authority's approval, with banks subject to the Central Bank's approval.
CAIRO - 18 December 2018: The Financial Regulatory Authority (FRA) issued decree No. 172 of 2018 concerning the rules and procedures for issuing and offering short-term bonds. The authority determined, through the decision, which companies are entitled to issue and offer short-term bonds.
Meanwhile, Egypt conducted financial treatments of treasury bills and bonds' taxes. Minister of Finance Mohamed Ma'it revealed that the reason behind the financial treatments of T-bills’ taxes is that it is one of the rights of the treasury.
CAIRO-2 December 2018: Minister of Finance Mohamed Ma'it revealed the reason behind the financial treatments of T-bills' taxes, saying that it's one of the rights of the treasury. Ma'it notes the share of the treasury from the taxes wasn't collected before.
Earlier in 2018, Egypt canceled bids for treasury bills four times, each worth LE 3.5 billion, amid calls to raise its interest rates.
The Central Bank of Egypt’s Monetary Policy Committee kept interest rates unchanged for the fifth time this year during November meeting, setting the overnight deposit rate and the overnight lending rate at 16.75 percent and 17.75 percent, respectively.
For the current fiscal year, the budget deficit is estimated to record LE 438.59 billion, or 8.4 percent, planned by the ministry to be financed through treasury bills and bonds and through international and Arab loans.
Egypt targets an average interest rate on the government debt instrument of 14.7 percent in the current budget, compared to an expected average of 18.5 percent in 2017/2018 budget.
Foreign investors’ investments in the Egyptian government debt instruments recorded $23.1 billion by the end of March 2018, up from about $20 billion in December.
Egypt needs to fund 2018/2019 budget by LE 714.64 billion; LE 511.21 billion will be provided from domestic debt instrument and the rest will come from foreign financing through the issuance of bonds and the IMF loan.
In November 2016, the Executive Board of the IMF approved a $12 billion loan as a financial assistance for Egypt to support the Egyptian economic reform program.
Upon the board's approval in November, Egypt floated its currency, losing around 50 percent of its value as part of the economic reform program which imposed taxes, including the value-added tax (VAT), and cut energy subsidies, all with the aim of trimming the budget deficit.