Egypt eyes shift to longer-term borrowing

Egypt is considering shifting away from costly short-term domestic debt toward longer-term borrowing, as falling interest rates provide cheaper options to finance the fiscal deficit, its finance minister said. The government will increasingly rely on five-to-seven-year bonds instead of Treasury bills that have shorter maturities and currently make up the bulk of local-currency borrowing, Amr al-Garhy said in an interview in Washington, where he was attending spring meetings of the International Monetary Fund and World Bank.

The evolution of the government’s domestic borrowing program suggests Garhy is confident inflation will continue to fall, allowing the Finance Ministry to capitalize on any subsequent reduction in interest rates.

Treasury securities have been a key part of the government’s efforts to help bridge a fiscal deficit that it says will fall to 8.4 percent of gross domestic product by mid-2019