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Tuesday, 4 December 2018

FinMin looks to raise Egypt’s average borrowing tenor to 3.5 years

FinMin looks to raise average borrowing tenor to 3.5 years: The Finance Ministry is looking to extend the average tenor of the state’s debt to 3.5 years from a current average of two or fewer by the end of FY2018-19, Vice Minister of Finance Ahmed Kouchouk said, according to Reuters’ Arabic service. The ministry is targeting increasing the figure to five years in the medium term. “The goal of raising the time-to-maturity of the debt [Egypt’s] is to avoid having to borrow on a monthly basis to settle loan payments,” Kouchouk added.

Background: Egypt’s emerging debt control strategy, which has been in the works since August, is focusing largely on increasing the country’s reliance on long-term debt instruments to alleviate the burden of repayment. The strategy hopes to bring down Egypt’s total public debt to 72-75% of GDP by 2021-22. The ministry will be looking to diversify public borrowing through new instruments (including green bonds and sovereign sukuks), new currencies, and new sources of funding besides treasury bill issuances.

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