EXCLUSIVE- FinMin, CBE look to clear government’s overdraft by June: The Finance Ministry and the Central Bank of Egypt (CBE) are in talks to clear the government’s overdraft, which had reached EGP 325 bn prior to Egypt signing for the IMF loan in 2016, a senior government official told Enterprise. The ministry will also issue a EGP 40-60 bn securitization bond for the CBE as part of the agreement. This would weigh on public debt and the budget deficit but will result in a more accurate reflection of the economy’s health. The Finance Ministry has been using the overdraft to repay the government’s debt and interest during the past period when the state’s financing gap was too wide.

Clearing overdraft accounts between the CBE and government agencies was part of Egypt’s agreement with the IMF, and the government is now looking at the overdraft owed by several bodies to the CBE, according to our source. Egypt’s improved FX reserves and overall liquidity levels have allowed the breathing room necessary for the move.