Egypt’s latest US dollar-dominated T-bills attract over $1.6 billion

Doaa A.Moneim , Tuesday 16 Nov 2021

Egypt’s recent US dollar-dominated treasury bills (T-bills) have managed to attract over $1.6 billion, according to the Central Bank of Egypt (CBE).

File Photo: A man counting Dollars. Al-Ahram

This offer is the fifth to be issued in 2020 of the same type and maturity date.

The CBE says it has accepted 28 out of 33 bids, with total investments exceeding 1.7 billion.

Including this offer, Egypt’s US dollar-dominated bills have managed to attract about $5 billion in total so far.

The CBE said that the proceeds from Monday’s offer will be utilised to pay the maturity of a previous bid from 17 November 2020, which is valued at $1.5 billion.

T-bills are a short-term financial instrument issued by the CBE with a maturity date of up to one year. This instrument allows investors to loan the government and obtain a yield rate in return.

T-bill proceeds are usually used to pay the obligations of previous offers of the same type, finance the payment of government debt and other ongoing expenses.

The Egyptian government’s gross debt is projected to hit 91.4 percent of its GDP in 2021, up from the 89.8 percent recorded in 2020, according to the Fiscal Monitor Report the International Monetary Fund issued in October.

However, the report expects this rate to decline as of 2022 to record 89.5 percent, then to 78.2 percent in 2025, and 74.1 percent in 2026.

Moreover, the government’s net debt-to-GDP ratio is expected to see a downturn in 2022 to reach 82.2 percent, then 78.8 percent in 2025, and 68.2 percent in 2026, according to the report.

Egypt is set to join JP Morgan’s GBI index for emerging markets as of the end of January 2022, which is expected to pump about $4.4 billion in new investments into the government’s debt instruments, including treasury bills and bonds, according to Egypt’s Minister of Finance Mohamed Maait.

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