2023-07-25 13:27:00
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Investing.com – World Bank data revealed that it must repay approximately 15.3 billion of its debts in the third quarter of this year, of which 2.8 billion is owed by the government. While the central bank has to pay $8.3 billion, of which $7.7 billion is in deposits, most of which are Gulf deposits that are constantly renewed, while banks have to pay $2.5 billion, and other sectors $1.566 billion.
The head of the Plan and Budget Committee in the Egyptian Parliament, Fakhry al-Faqi, had stated a few days ago that Egypt’s foreign debt had reached $165 billion, explaining that the state was fully aware of the size of the external debt, and therefore foreign loans were directed to infrastructure projects.
This coincides with the rise in Egyptian pound-denominated bonds traded on the Luxembourg Stock Exchange, as part of the structured products of US investment banks Goldman Sachs (NYSE:) and JPMorgan (NYSE:).
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Egypt’s debts
Egypt had to pay $18.6 billion during the second quarter of 2023, as the government had to pay $2.1 billion, and the central bank had to pay $7.2 billion, including $6.6 billion in deposits, while banks had to pay $5 billion, including $4.4 billion in loans, while other sectors had to pay $4.5 billion.
During the fourth quarter, from October to next December, the total amount that Egypt will pay is $6.93 billion, and the government must pay $2.8 billion, and the central bank has regarding $2.7 billion, including $2.3 billion in deposits, $973 million for banks, and regarding $470 million for other sectors.
During the period from January to March 2024, 14.4 billion dollars must be paid, of which 3.5 billion dollars will be paid by the government, the central bank 8.2 billion dollars, including 7.8 billion dollars, banks regarding 2.2 billion dollars, and other sectors regarding 429 million dollars.
Thus, the volume of external debt and interest that must be paid during the year, from March 2023 to March 2024, amounted to regarding $55.2 billion, according to World Bank data.
During the period from April 2024 to September of the same year, regarding $12.9 billion must be paid, between $7.4 billion on the government, regarding $1.9 billion on the Central Bank, $2.9 billion on banks, and other sectors regarding $736 million.
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Positive indicators
Egyptian pound-denominated bonds traded on the Luxembourg Stock Exchange rose, as the most recent bond was listed on July 14, with a value equivalent to $3.81 million at an exchange rate of EGP 30.95 to the dollar, according to the listing document.
Egyptian economist Hani Genena said, “The rise in bonds listed on the Luxembourg Stock Exchange is a step that may reflect investors’ reassurance of Egypt’s credit position, as well as the pound’s exchange rate.”
He added, “With the rise in dollar-denominated bonds, the decrease in the cost of insurance for sovereign debt, and the rise in pound-denominated bonds, the next step may be the entry of foreigners into the local debt market.”
The amounts accepted by the Ministry of Finance in treasury bond bids, which are longer-term than bills, rose following months of reticence in borrowing at high interest rates for long periods.
At last week’s bond auction, the ministry agreed to borrow 2.36 billion pounds through 3-year bonds, the highest acceptable value since last February, and interest rose only two basis points to 23.026% on average.
Also, treasury bills for a period of 182 days in the bid of July 18 witnessed an increase in the accepted amount to the highest rate since January, as it agreed to 42.6 billion pounds, and for a period of 273 days in which it accepted 11 billion pounds in last week’s bid, but in yesterday’s bid for a period of 364 days, the Ministry of Finance accepted only 1.6 billion pounds out of regarding 16.2 billion pounds it received to subscribe to the tender in which it requested 17 billion pounds.
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