Egypt's Plan to Sell Debt to Citizens Abroad Delayed

An Egyptian plan to sell certificates of deposit (CDs) - a form of debt - to its citizens living abroad to finance its deficit has been delayed because of technical problems over their issue in a single Gulf country, a minister said.Egypt is looking for foreign currency to finance both budget and balance of payments deficits that have widened dramatically during the economic and political turmoil of the last year. t also plans to sell parcels of land to its citizens abroad and dollar-denominated Islamic sukuk bonds to foreign institutions to help plug an external financing shortage estimated at $11 billion over the next 18 months.

Planning and International Cooperation Minister Faiza Abu El-Naga told reporters that Egypt has been negotiating with Gulf countries on the CDs, which she expected would raise the government $1 billion. "It has been agreed with all the banks in the countries except for one country, and talks with it are continuing to resolve a few technical problems that it has over the deposit operation," she said, without naming the country. The government will announce payment schedules and interest rates later. It will begin selling the CDs as soon as the technical problem is resolved, she said.

Egypt's finance minister said in late February that the government would offer $2 billion in three- and five-year CDs that would carry an interest rate of "no more than 4 per cent". At the time, he said he hoped to begin selling the CDs within one or two weeks. On 24 March, Egypt also began offering an initial group of land parcels in new satellite cities near Cairo and Port Said that it hopes will earn it $2.5 billion. Egypt's cabinet agreed on Wednesday to reduce the down payment on the land to 35 per cent of the cost from the 50 per cent it was initially asking for, Abu El-Naga said. It will also allow buyers to pay using funds already held in dollar deposits at Egyptian banks.