The government aims to issue bids for treasury bills (T-bills) and bonds worth EGP 230.25bn during March as part of a larger plan through which the government aims to borrow EGP 602.25bn from the local market during the third quarter (3Q) of FY 2021/22.
The government’s plan, which was revealed by the Ministry of Finance, includes the issuance of 20 T-bill bids worth EGP 155bn and the issuance of 18 bond bids worth EGP 75.28bn.
The finance ministry focused most of its issuance of treasury bills in bids for a period of 182 days, as the ministry is scheduled to offer in this term bids worth EGP 63.5bn, a bid worth EGP 44.5bn that will span a period of 273 days, 364-day bills worth EGP 33.5bn, and 91-day bills worth EGP 13.5bn.
The ministry also intensified the offering of short-term bonds significantly during March, as it is scheduled to issue zero-coupon bonds for a period of one and a half years at a value of EGP 59.5bn.
It is also scheduled to offer two-year bonds worth EGP 2bn, 3-year bonds worth EGP 7bn, 5-year bonds worth EGP 2.5bn, 7-year bonds worth EGP 2.5bn, and 10-year bonds worth EGP 1.25bn. Moreover, for a period of 15 years, the ministry is offering bonds worth EGP 500m.
Banks operating in the Egyptian market are the largest sectors investing in T-bills and bonds, which the government periodically offers to cover the state’s general budget deficit.
These bonds and bills are offered through 15 banks that participate in the primary dealer’s system in the primary market, and these banks resell part of them in the secondary market to individual investors and local and foreign institutions.
The recently issued monthly bulletin of the Central Bank of Egypt (CBE) revealed that the volume of outstanding balances of treasury bills reached about EGP 1.442trn in December 2021, compared to November’s EGP 1.445trn.
The CBE pointed out that the investments of public sector banks in bills amounted to about EGP 202.015bn compared to EGP 210.098bn, while private sector investments recorded about EGP 301.541bn compared to EGP 316.7bn.
It added that the investments of specialised banks in bills recorded about EGP 47.764bn at the end of 2021, up from November’s EGP 40.221bn, while the investments of foreign bank branches recorded about EGP 40.295bn in December, up from EGP 38.558bn.
In the same context, the ministry revealed that the volume of outstanding balances of local T-bills and bonds reached about EGP 3.867trn in January 2022.
According to the latest report published by the ministry on its website, the volume of outstanding balances of treasury bills until the end of last January amounted to about EGP 1.466 trillion, recording EGP 915.596bn in 364-day bills, EGP 341.749bn in 273-day bills, EGP 145.169bn in 182-day bills, and EGP 63.989bn in 91-day bills.
Furthermore, according to the ministry, bids for bills amounting to about EGP 186.184bn were due during the month of February, while the rest of the existing bids are due throughout the remainder of the current year until 24 January 2023, taking into account that other bills with the same deadlines are re-issued on a periodic weekly basis.
This comes as the finance ministry revealed that the volume of outstanding balances of treasury bonds reached about EGP 2.401 trillion by the end of January 2022, of which about EGP 148,814bn were Zero Coupon bonds.
Bond bids worth EGP 17.1002bn were due on 10 February, while the remaining value is due until 18 January 2037, taking into account also that other bond bids are re-issued on a periodic weekly basis, just like the bills.
The ministry offered these bonds from 10 February 2015 to 18 January 2022, and the average return rate on them is 14.695%.