Egypt’s one-year treasury bill yields jumped to the highest level since September after the government indicated it will sell more of its shortest-term securities to repay about $1.6bn a week of maturing debt.
The average yield on one-year securities climbed by 33 basis points, or 0.33 percentage point, to 14.79 per cent at an auction, while yields on six-month notes surged by 47 basis points to 14.28 per cent, according to central bank data compiled by Bloomberg.
Yields on six-month bills for Greece, which shares Egypt’s B- rating at Standard Poor’s, are at 4.25 per cent.
Local yields are surging and the pound is weakening in unregulated trading as the government cuts dollar supplies to finance imports and reserves dwindle.
While seeking to quiet protests and resolve International Monetary Fund loan talks, Egypt needs to repay about £138bn of local debt maturing this quarter, a six per cent increase from the previous three months and the equivalent of about $1.6bn a week at the official exchange rate, data compiled by Bloomberg show.
“It’s a problem for the government to build more debt on the short end, but they have to,” the Global Head of Emerging-Markets strategy at Brown Brothers Harriman & Company in New York, said by phone, Mr. Win Thin, said. “It’s a real mess there in Egypt.”
The Arab country aims to raise £79.8bn through the sale of three- and six-month bills, up from the previously planned £52.5bn, according to a debt sale calender for the three months ending June 30 obtained by Bloomberg.