Mon, Feb 21, 2011 - Page 10 News List

Egypt plans to sell US$1.7 billion of bills this week

Bloomberg and AP, CAIRO

Egypt, reeling under labor strikes and bank disruptions after a revolt ousted Egyptian president Hosni Mubarak, plans to sell 10 billion Egyptian pounds (US$1.7 billion) of Treasury bills this week.

The Egyptian Ministry of Finance offered 1 billion Egyptian pounds of 91-day bills and 3.5 billion Egyptian pounds of 273-day notes at an auction yesterday, according to data posted on its Web site.

The ministry will also auction 2 billion Egyptian pounds of 182-day securities and 3.5 billion Egyptian pounds of 364-day bills today, it said.

The protests that led to the Feb. 11 ouster of Mubarak shuttered businesses, scared off tourists and raised the government’s borrowing costs to the highest level in two years.

Egyptian Finance Minister Samir Radwan said on Monday last week the budget deficit would widen to about 8.4 percent of GDP in the current fiscal year ending June, from 8.1 percent as spending increases and economic growth slows after Mubarak’s fall.

The turmoil had forced banks to close and sent the currency skidding to a six-year low.

Banks reopened yesterday. It marked the second time in three weeks that Egypt’s banks have reopened after a state-ordered closure, highlighting the uncertainty that prevails in the country more than a week after mass demonstrations toppled Mubarak. An earlier attempt to open the banks and establish a semblance of normalcy during the height of the anti-government protests lasted only a week before the lenders were ordered shut.

“I think we’re back to business,” said Wael Ziada, head of research at the Cairo-based Mideast investment bank EFG-Hermes.

He added that barring any major problems, he did not think the central bank will close lenders again.

The focus now will be on taking “measures to safeguard the banks from a contagion effect,” he said.

Officials at the stock exchange said on Saturday that the market would announce an opening date later and that it was putting procedures in place to prevent “market troubles.”

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