The new bonds will secure foreign currency and expand the financial solutions available to Egypt's private sector, the cabinet said in a statement on Thursday.

"The IFC will help Egypt by securing foreign currency in the equivalent of the EGP bonds issued. The goal of such investments will be for development assistance," banking expert Mohamed El-Beih told Ahram Online.

Since its inception, the IFC has invested a total of $7 billion in Egypt, and $3.2 billion since 2018.

El-Beih explained that debt instruments issued in local currency will be easier for the Egyptian government to repay, compared to those issued in foreign currency.

The Egyptian government issues debt instruments primarily to fund its budget deficit. Egypt's budget deficit accounted for six percent of its GDP in the fiscal year 2022/2023, according to Minster of Finance Mohamed Maait.

The country's debt-to-GDP ratio was estimated at 95.6 percent for FY2022/2023. GDP stood at EGP 9.8 trillion ($318.23 billion) that year. 

The government has increased its budget deficit estimate to 6.9 percent of GDP for FY2023/2024, which started on 1 July.

According to the latest data released by the CBE, Egypt’s external debt rose by 4.8 percent to $165.3 billion in the third quarter (Q3) of FY2022/2023, compared to $157.8 billion in the same quarter the previous year.

Egypt is coping with a local shortage of US dollar liquidity and a financing gap estimated at $17 billion through 2026.

The country has been increasing efforts to fulfil its commitments to the IMF under the Extended Fund Facility (EFF) loan programme, approved in December 2022. Among these commitments is offering 32 state-owned companies to strategic investors.

The IFC signed an agreement with Egypt in June to provide advisory services for the country's privatization programme.