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Egypt plans bonds drive and may review IMF measures

A petrol station in Cairo. Egypt has raised fuel prices three times this year as it aims to comply with IMF requirements Eddie Gerald/Alamy via Reuters
A petrol station in Cairo. Egypt has raised fuel prices three times this year as it aims to comply with IMF requirements
  • Egypt to issue $200m of bonds
  • Trying to rejoin JP Morgan index
  • $6bn revenue lost this year

Egypt plans to issue new sukuks and green bonds worth between EGP5 billion ($102.9 million) and EGP10 billion ($205.8 million) before June 2025, the end of its current financial year.

The country’s finance minister Ahmed Kouchouk told reporters on Saturday of the ministry’s intentions to issue the new bonds.

Earlier in the year Kouchouk spoke of his intention to diversify Egypt’s debt base.

In September Kouchouk told investors that Egypt plans to issue $3 billion in debt in the current financial year, including the first eurobond sale since late 2021.

Bloomberg has also reported that Egypt is actively trying to rejoin JP Morgan’s Emerging Markets Bond Index, from which it was removed in January.

Since Kouchouk became finance minister in a cabinet reshuffle in July, he has been tasked with balancing the state’s coffers and reducing the burgeoning national debt bill. In an effort to attract international investors and widen the tax base, he has introduced reforms aimed at facilitating tax collection.

Egypt is implementing a plan in agreement with the International Monetary Fund to tighten fiscal policy, reduce state subsidies and increase the share of the private sector.

In its latest austerity decision, Egypt raised the price of fuel over the weekend by between 10 percent and 17 percent. Cutting fuel subsidies has been a central policy recommendation of the IMF. It is the third time this year that Egyptian fuel prices have gone up.

On Sunday President Abdel Fattah El Sisi suggested that the current arrangement could be renegotiated given “extremely difficult regional, international and global circumstances”.

As a result of heightened regional tensions Egypt’s vital Suez Canal revenue has halved, and it has had to scale down its ambitious tourism targets.

Despite widespread predictions that inflation would fall throughout 2024, in the past two months it has grown slightly and groups including Goldman Sachs say it is unlikely to drop substantially before January. 

At the last meeting of the Central Bank of Egypt’s monetary policy committee on Thursday the bank opted to keep interest rates at the record high of 27.25 percent for deposits and 28.25 percent for lending, a rate that has been in effect since March.

Speaking on Sunday Sisi said the government has lost between $6 billion and $7 billion in 2024 in the period of regional tensions and falling Suez Canal revenues, straining the government’s capacity for austerity measures.

Should economic pressures on Egyptians increase, he said, “the situation must be reviewed and the situation with the [IMF] must be reviewed.”