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Monday, 18 September 2017

Moving forward with the eurobond issuance plan

Moving forward with the eurobond issuance plan: The Finance Ministry has asked cabinet to approve its two planned eurobond issuances, sources told Reuters. “The first issuance would range between EUR 1-2 bn before the end of 2017. The second would range from USD 4-8 bn and would be in 2018.” Finance Minister Amr El Garhy told Bloomberg he expects the cabinet to approve the issuance in two to three weeks’ time. The minister spoke about “pockets of money” in Europe that are interested in Egyptian debt and said “we’re taking good advantage of the current market conditions as well as the progress in our current economic reform program.”

El Garhy also expressed some frustration at Moody’s not raising Egypt’s credit rating or even upgrading its outlook from stable. “It was a bit strange to say the least … In a year full of economic reform actions and very bold actions on all fronts, you don’t see anything, you don’t see any positive sign,” El Garhy said about Moody’s inaction.

Separately, El Garhy believes that inflation should drop to c. 15% by the end of the current fiscal year. In an interview on the economy with Youm7 editor Ahmed Yakoub, El Garhy said that the central bank’s interest rate policy has raised the cost of Egypt’s debt service this year to EGP 400-410 bn, up from a projected EGP 380 bn before the interest rate hikes. As for tax revenues, El Garhy expects these to come in at around EGP 605 bn in FY2017-18.

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