Egypt's cabinet approved the issue of international bonds worth $1.5 billion, state-owned news agency MENA reported on Tuesday.

Finance minister, Hany Qadry, announced in October of last year, plans to tap into the international bonds markets during the first quarter of 2015 as a means to fill the financial gap in the state budget.

Egypt's state deficit is projected to reach 11 percent in the fiscal year 2014/15, and is to be financed through local debt and petroleum shipments from the United Arab Emirates in addition to the international bonds.

The government began a financial consolidation programme in July to reach its deficit target. The programme including slashing fuel subsidies by LE44 billion to raise prices at the pump by up to 78 percent, a new property tax law and a temporary 5 percent income tax raise on the wealthy.

Qadry said that the decision came in light of the move by international rating agency Fitch to upgrade Egypt's credit rating to B as well as the country's ability to repay a total of $3.5 billion in debt to foreign oil firms, MENA reported.