Minister of Finance Amr El-Garhy (Photo: Al-Ahram)
Egypt issued on Wednesday $4 billion in bonds in the Irish Stock exchange, the finance ministry said, in an attempt to create new financing sources to plug the country's widening budget deficit.
Bonds worth $1.36 billion were issued with an annual interest rate of 4.62 percent, $1.32 billion with 6.75% rate and $1.32 billion with a 7% annual rate, the ministry said in a statement on Thursday. The bonds will be repaid in December 2017, November 2024 and November 2028 respectively.
The issuing is part of the finance ministry's effort to diversify financing, in order to plug the country's budget deficit, alleviate burdens on local financing sources and lower public debt, finance minister Amr Al-Garhy said.
The ministry said the move is part of a broader plan to issue international bonds in global markets in the near future.
Egypt's central bank has used part of the bond issuance to secure $2 billion in financing from international banks, in a move announced Thursday that aims at boosting the country's foreign reserves.
Egypt's slump in foreign reserves and its widening budget deficit have pushed the country to launch a reform program to stabilize the economy. Last week, the central bank floated the pound and raised fuel prices. The government has also cut electricity subsidies and introduced a new Value Added Tax.
The country is waiting the International Monetary Fund to sign off on a $12 billion loan package which has received the organisation's initial approval . Officials say the loan will help restore investor confidence in the economy.