Egypt's Finance Ministry Announces Major Debt Offerings

The Egyptian Ministry of Finance will offer eight treasury bill and bond tenders this week. According to Dailynewsegypt, the combined value is EGP 190 billion. The offerings include four treasury bill tenders worth EGP 160 billion. They also include four treasury bond tenders totaling EGP 30 billion. The Ministry announced this as part of its ongoing financing plan. Details about specific maturities or interest rates were not included in our source report.

Breakdown of the Treasury Offerings

The treasury bill portion represents the majority of this week's offerings. At EGP 160 billion, it accounts for about 84% of the total value. The treasury bond portion is smaller at EGP 30 billion. This equals roughly 16% of the total. The Ministry did not specify the exact dates for each tender. It also did not name the specific banks or institutions managing the sales. These details were not included in our source report.

Why It Matters

Egypt regularly uses treasury bills and bonds to finance government operations. The Central Bank of Egypt reported government debt reached 92.7% of GDP in 2023. This was up from 87.2% in 2022. The International Monetary Fund approved a $8 billion loan program for Egypt in March 2024. The program aims to stabilize the economy and reduce debt burdens. Large weekly offerings like this one help meet immediate funding needs. They also influence interest rates across the banking sector.

Market Context for Egyptian Debt

Egypt's domestic debt market has seen significant activity in recent years. The Ministry of Finance raised EGP 1.2 trillion through treasury bills in the first half of 2024. This represented a 15% increase over the same period in 2023. Foreign holdings of Egyptian treasury bills dropped to $8.5 billion in December 2024. This was down from $15.2 billion in December 2023. High inflation has pressured yields. The Central Bank reported annual inflation at 33.1% in December 2024. This was slightly lower than the 34.2% recorded in November.

What Businesses Should Watch

Companies operating in Egypt should monitor interest rate trends. Large treasury offerings can absorb liquidity from the banking system. This may tighten credit conditions for businesses. The Egyptian pound has faced depreciation pressure. The Central Bank devalued the currency by 38% in March 2024. Another devaluation occurred in October 2024. Businesses with foreign currency debt should watch for further exchange rate movements. The government's borrowing costs affect fiscal policy. Higher debt service may reduce public spending on infrastructure or subsidies.

Recent Government Financing Activities

The Ministry of Finance has maintained an active domestic borrowing schedule. In December 2024, it offered EGP 165 billion in treasury bills across four tenders. The average yield on 91-day bills was 24.3%. The yield on 364-day bills reached 26.1%. These rates reflected persistent inflation concerns. The government also issued EGP 25 billion in five-year bonds in November 2024. The coupon rate was set at 25.5%. Successful bidders included National Bank of Egypt, Banque Misr, and Commercial International Bank. These institutions are regular participants in government debt auctions.

Regional Comparison of Debt Markets

Egypt's debt offerings are among the largest in the Middle East and North Africa region. Saudi Arabia issued $12 billion in international bonds in January 2025. The UAE raised $1.5 billion in sovereign bonds in December 2024. Morocco's government debt stood at 71.3% of GDP in 2023. Egypt's higher debt ratio requires more frequent domestic borrowing. The country's population of 106 million creates substantial fiscal demands. Public sector wages and subsidies consume about half of government spending. Debt servicing costs account for another 40% of revenue.

Impact on Banking Sector Liquidity

Egyptian banks are primary buyers of government debt. The banking sector held EGP 4.8 trillion in government securities as of September 2024. This represented 45% of total banking assets. High holdings of government paper can crowd out private sector lending. Loan growth to businesses slowed to 8.2% in 2024. This was down from 12.5% in 2023. The Central Bank has maintained high reserve requirements. Banks must hold 14% of deposits as reserves. This limits funds available for other investments.

Future Financing Outlook

The Ministry of Finance will likely continue weekly treasury offerings. The government faces a budget deficit target of 6% of GDP for fiscal year 2024-2025. This is down from 7.3% in the previous year. Achieving this target requires substantial domestic borrowing. The IMF program includes commitments to reduce the deficit gradually. Egypt plans to raise $2 billion from asset sales in 2025. Proceeds would help reduce borrowing needs. The government also aims to extend debt maturities. This would ease refinancing pressure in coming years.