Egypt Seeks to Raise $2.2 Billion in Debt After Aid Commitments

Egypt plans to offer 13 billion Egyptian pounds ($2.2 billion) in treasury bills and bonds over the next week after receiving aid commitments from the European Union and World Bank.

The country raised 4.55 billion pounds at debt auctions in the past week, or 30 percent of its goal, as treasury-bill yields rose to records. The average on one-year securities climbed for the 14th time to 15.867 percent, the highest level since Bloomberg started tracking the data in 2006.

The lack of aid and the withdrawal of foreign investors from the domestic debt market amid political unrest has forced the country to increase its reliance on local banks to fund the widening budget deficit. Egyptian banks have increased their holdings of local treasury bills by 52 percent in the first 10 months of last year to 249.8 billion pounds, according to central bank data.

The European Union is preparing an aid package for Egypt valued at $650 million and the World Bank will provide $500 million in “expedited financial support,” the Finance Ministry said in a statement today. The Arab country hasn’t received any of its share of $35 billion pledged by the Group of Eight major economies to Egypt and Tunisia, Prime Minister Kamal El-Ganzouri said yesterday.