Deputy minister of finance for monetary policies Ahmed Kojak said that the ministry is not going to issue any other treasury bonds in the current fiscal year (FY) 2016/2017.
He stated that the financial gap of the current FY is already covered, adding that the gap of the next FY 2017/2018 is also nearly covered, which means there is no need for another issuance. However, the ministry might consider issuing new bonds by the end of 2017 (during FY 2017/2018) if the government needs foreign currency.
The Ministry of Finance issued treasury bonds worth of $4bn, which were distributed across five-year, 10-year, and 30-year bonds at a face value of 6.125%, 7.5%, and 8.5%, respectively. The bonds were geographically distributed between North America (50%), Europe (40%), Asia, and the Middle East.
Minister of Finance Amr El-Garhy said that the Egyptian government and the ministry are studying the probability of issuing Chinese renminbi-denominated Panda bonds and Japanese yen-denominated Samurai bonds, following the strong demand on Egypt and the trust in its reforms.
The step comes after the government has raised its issuance value to $4bn instead of $2.5-3, due to the high demand, which made it the biggest issuance in Egypt’s history and in Africa, according to Kojak.
Kojak mentioned that the ministry received offers from new investors for the first time, adding that the government will consider communicating with them to guarantee their loyalty, so they would offer to buy any bonds that Egypt may issue in the future.
“It’s too early to talk about changing the economic reform programme which is backed by the International Monetary Fund,” Kojak said, adding that the programme is in its very first stages, and changing it is not currently considered.
It’s important to mention that the National Bank of Egypt will issue bonds in international markets to earn $500m to support its foreign currency reserves.