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Tuesday, 4 September 2018

FinMin looks to pull the breaks on foreign borrowing

EXCLUSIVE- FinMin looks to pull the brakes on foreign borrowing: The Finance Ministry could set a limit on fresh international borrowing this year in a bid to curb Egypt’s rising foreign debt and bring public debt down to 91% of GDP, a ministry source told Enterprise on Monday. The curb could include a limit on new borrowing from international financial institutions, and details of the limitations are likely to be unveiled in October, when the ministry presents its debt control strategy — a crucial component of the Finance Ministry’s comprehensive fiscal policy hinted at by Finance Minister Mohamed Maait over the weekend.

Soaring yields are also driving the decision: Yields climbed to a record high at the ministry’s treasury sale on Sunday, the source added without providing additional detail. At play: The global macro climate, particularly the impact on EM of the debt meltdown in Argentina. With that in mind, the new debt control policy could see treasury issuances limited to longer-duration bonds, the source said. The Finance Ministry’s website shows that it canceled a sale of treasuries on Monday, but the CBE’s website showed that EGP 3.5 bn in T-bills were sold.

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