The Finance Ministry announced an offering of treasury bills worth LE5.5 billion Sunday, in the government's newest move to abate its growing budget deficit.
In December, former Planning Minister Ashraf al-Araby said the country's fiscal budget deficit could reach LE200 billion in the 2012/13 fiscal year. That year's budget, released in July, had forecast a deficit of LE135 billion, compared with an actual deficit of LE166.7 billion for the previous year. Economists at the time said that forecast was optimistic.
Of Sunday's treasury bill offering, LE4 billion expire after just 273 days, with an average interest rate of 13.974 percent.
Other LE1.5 billion bills offered Sunday expire after 91 days, with an average interest rate of 12.872 percent.
Also, the Central Bank of Egypt announced last week that it would be selling treasury bills worth LE12 billion at auction Thursday and Sunday.
Treasury bills and bonds are currently the main funding mechanism for both paying off the government's debt and financing new projects. But the mechanism is only getting more and more expensive, with the country's recent credit rating downgrade. A further downgrade may be in Egypt's near future, a Fitch rating agency analyst told Reuters Wednesday.
The Finance Ministry had previously said the government would make an offering of bills and bonds worth LE150 billion in the third quarter of the 2012/13 fiscal year.
Egypt needs to borrow LE135 billion to fill the budget deficit, but a large part of the new bills and bonds are raised to pay off old government debt that has matured.
The total foreign and domestic debt stood at LE1.2 trillion in June 2011, which is 88 percent of the gross domestic product.
