The Egyptian cabinet’s media centre said on Wednesday that investors are eager to purchase the five- and 10-year treasury bonds (T-bonds), which reflects Egypt’s economic strength and the success of the country's economic reform programme.
In a statement released on Wednesday, the cabinet revealed that the yield average on the 10-year T-bonds was 3.74 percent, compared to a 1 percent yield average on the T-bonds offered last January.
The yield average recorded 14.417 percent, while the real yield on the same bonds increased to 7.717 percent in the most recent offering compared to 5.952 percent in January.
“In the same vein, the yield average on five-year T-bonds decreased by 3.94 percent compared to January, registering 14.35 percent, while the real yield in the same T-bond category increased to 7.65 percent in the latest offering compared to 6.092 percent in January,” the statement said.
An info graph published on the media centre's official account on Facebook showed that the ratio of government debt to the GDP has decreased to 90.2 percent during FY 2018/19, compared to 97.3 percent in FY 2017/18 and 108 percent in FY 2016/17. The government is aiming to decrease the ratio of debt to the GDP to 83 percent in FY 2019/20 and 80 percent in FY 2020/21.
The ratio of the total budget deficit to the GDP has decreased to 8.2 percent in FY 2018/19, compared to 9.7 percent in FY 2017/18 and 10.9 percent in FY 2016/17. The government aims to decrease the ratio to 7.2 percent in FY 2019/20, to 6.2 percent in FY 2020/21, and to 4.7 percent in FY 2021/22.
The cabinet illustrated that the incentives that push investors to purchase the latest T-bonds include the declining inflation rate to 6.7 percent in August, the lowest in six years, and the recent interest rate cuts applied according to the last Monetary Policy Committee decree, which slashed interest rates by 1.5 percent (150bps) for overnight deposit rates, overnight lending rates, and the rate of the main operation.